*” Massive Disconnect between Election Promises & Skyrocketing NSW Debt”-
Read The Sun-Herald Analysis of NSW Debt Levels
Last weeks The Sun-Herald provided a comprehensive analysis of the NSW Economy and Debt Levels that is essential reading .
*This content comprising Quotes and key takeaway points is extracted and shared from an article entitled “Tougher Times ahead no matter who wins” (published in the Sun-Herald on 19 march ,2023 ) in the Public Interest!
What is the True State of NSW Government Finances under the LNP Government lead by Premier Dominic Perrottet ?
As NSW voters go to the Polls on saturday the 25th of march,.there have been so many desperate Election Promises ,..and Claims made by all sides of Politics both Labor and LNP that it is confusing and difficult for the average voter to understand what the reality is. Both sides of politics are bandying around terms like “budget black hole” and using scare tactics and at the same time making outlandish unfunded spending promises ,..so what is the the current state of play in NSW with our States Finances ? (Ed.)
The following content is reproduced in order to inform and facilitate discussion.
KEY TAKE-AWAY POINTS from the Article “Tougher Times ahead no matter who wins” dated Sunday 19 march, 2023
-“Last month a NSW budget update said the state economy faced “headwinds and uncertainty “ including an increasingly challenging global landscape. It forecast a sharp slowdown in the state economy over the next 18 months,and predicted the NSW unemployment rate to climb from current historic lows to 4.5 per cent next financial year. “
“The outlook is subject to a high degree of uncertainty ,including how households and businesses respond to higher interest rates “ ,the budget review said .Additionallyy ,the prospect of a more severe slowing of global growth is a significant downside risk.”
“Figures published this month showed State Final demand, a key state-level indicator ,fell 1 present in the last quarter,suggesting the economy is losing momentum as households and business adjust to higher interest rates.”
“The pandemic left the NSW government’s finances greatly weakened.”
“The effects of the COVID-19 crisis reduced key state revenues and forced the government to spend billions extra to protect citizens and and support businesses.””
“As the state budget plunged deep into the red , the coalition government dramatically increased its borrowings to fund unexpected COVID-RELATED expenses while investing in new infrastructure.”
“The large-scale relief and reconstruction required following last years’s flood disaster has added even more to state spending .”
“As a result ,the next government will have to grapple with a budget deep in deficit.”
“A pre-election budget update made public by NSW treasury officials on March 8 forecast the budget shortfall for this financial year to reach $12.03 billion,which is $668 million worse than forecast by Treasurer Matt Kean only four weeks earlier.”
“The budget deficit for 2023-24 which nine months ago was forecast to be $2.8 million ,has now ballooned to $7.1 billion.”
“That will be the NSW government’s fifth consecutive deficit.”
The economic upheaval caused by COVID-19 has also left NSW with a much bigger debt burden than previously anticipated.
“Shortly before the pandemic , NSW effectively had $10 billion in the bank,..but by June 2023 that will be a net debt of nearly $80 billion,..rising to $118 billion by 2026.
“By mid decade,nett debt will be equivalent to 14 per cent of the state’s annual economic output -far higher than at any time in the past three decades.
“And the sharp rise in global interest rates in the past year means it will cost much more to service future borrowings.”
“Budget papers show interest on borrowings paid annually by the NSW government will almost double in the next four years from $3.62 billion to $7.01 billion.”
“The NSW government is still very well equipped to service its debts -the state has the highest possible triple-A credit rating from two major international rating agencies.”
“Even so , the incoming government will confront a slowing economy and a state budget under growing pressure.”
The article finished with the following quote.
“I think it’s going to be a bumpy road.” –
Cherelle Murphy, Chief Economist EY Ernst Young
*The Sydney Times acknowledges that the above quotations and information is reprinted from the Sun-Herald ,..in the public interest,.. and in order to facilitate informed community discussion and analysis.
*Some Text highlighting and emphasis done by the Editor of the Sydney Times
