NSW State Budget 2022-23 – Fiscal and Monetary Policy

The NSW State Budget 2022-23 was delivered by the Treasurer, Matt Kean, on June 21, 2022.

A budget shortfall of $11.3 billion is projected for 2022-23, reflecting the level of investments made in the health system to improve capacity and resilience, continued COVID-19 support and flood response . Government spending is expected to decline as stimulus payments are removed and the economy continues to rebound. The government is expected to return to surplus by fiscal year 2024-25.

The budget focuses on easing cost-of-living pressures as well as a state commitment to ensuring more affordable housing. We have listed some of the measures announced below.

Housing – Stamp duty waived for first-time buyers

Eligible first-time home buyers will have the option of paying stamp duty up front or paying annual property tax on their first home purchase up to $1.5 million. The new annual property tax will be calculated at $400 plus 0.3% of the unimproved property value. The choice to join this program will be available from January 16, 2023. When contracts are traded between the enactment of the legislation and January 15, 2023, eligible first-time home buyers will be able to apply to join and receive a refund stamp duty. after January 16, 2023.

Housing – Equity Sharing Program

$780.4 million for a two-year trial of an equity share program for up to 6,000 eligible single parents, senior singles and first-time home buyers who are teachers, nurses or in the police. Under this scheme, the NSW Government will pay a portion of the purchase price of a property in return for an equivalent ownership share of the property. The NSW Government contribution can be up to 40% of the purchase price of a new home and up to 30% of the purchase price of an existing home. The buyer must have a minimum deposit of 2% of the purchase price, with no mortgage insurance from the lender required. No repayment is required on the capital contribution and no rent or interest will be charged as long as a participant remains eligible for the program. Participants can make voluntary payments to gain full ownership of their property. Full details about this program and eligibility requirements can be found here.

Housing – Other

Other housing measures include:

• $300.0 million for a third cycle of the Accelerated Infrastructure Fund, including $120.0 million for the regions, to co-finance critical housing infrastructure.
• $300.0 million to maintain and upgrade more than 15,800 social housing units, extending the life of social housing and ensuring tenants have safe housing.
• $174.0 million for 271 new homes for key workers in regions and remote areas of New South Wales.
• $149.8 million for 200 new and 260 improved homes for First Nations people, as well as 4,400 climate-resilient and energy-saving upgrades, helping to reduce overcrowding and improve the quality of life of tenants.

Cost of life

In this budget, the new measures introduced total $2.2 billion over four years and include:

• Toll Rebate Scheme where, each quarter, qualifying non-commercial and small business customers will receive a 40% cash rebate for every dollar spent on tolls once they have reached a minimum of $375, allowing NSW drivers to save up to $750 per year
• Brighter Beginnings Affordable Preschool initiative to provide tuition relief to families with children in the community and the mobile preschool and long-term care sectors.
• Back to School Grant, providing $150 to every school child in NSW to cover the cost of school supplies in 2023.
• Eight-year Energy Bill Buster program to help eligible households lower their gas and electric bills by providing technology solutions, including solar panels and high-efficiency appliances.
• Two-year pilot of a $250 Regional Apprentice and Uni Prepaid Travel Card for University and Apprentice students in the New South Wales region each year to help reduce travel costs.

COVID-19 recovery measures

$2.3 billion (excluding infrastructure and health) to deliver a range of measures to support the state’s economic recovery. Ongoing commitments include:

• $192.0m NSW Parents Scheme to reward and thank eligible NSW households for their efforts to support home learning in 2021
• $155.0 million before and after school care program, providing a $500 voucher for the cost of before and after school care for every child in New South Wales
• $130.0 million mental health and wellness package
• $66.2 million Alfresco restart package and $50.0 million CBD revitalization program to bring the streets of NSW back to life with alfresco dining, live music and entertainment entertainment
• A range of regional projects, including $40.0 million for priority regional infrastructure.

Investing in Women

The New South Wales Government will invest in significant reforms to make New South Wales the best place in Australia for women to live, work and raise families. Up to $5.0 billion (over 10 years) will be invested to establish the Affordable and Accessible Childcare and Economic Participation Fund, part of a package of education and childcare reforms young children, including universal preschool and affordable preschool education. This is estimated to increase women’s participation in the workforce and increase economic activity in New South Wales (gross state product) by $4.7 billion to $17.1 billion per year by 2032 -33.

For business owners, the government announced the following funding:

• $12.0 million to establish the Carla Zampatti Fund (a venture capital fund for women) to support women entrepreneurs and small business owners, including $10.0 million for the Fund and $2.0 million dollars for the creation and operation.
• $9.5 million for dedicated support for women business owners through the Service for Business and Business Connect programs.

Public sector employees

The government has announced support for public sector employees in the form of a $3,000 payment to NSW Health employees in recognition of their work on the front lines of the COVID-19 pandemic. In addition, an increase in compensation for public sector employees of 3.0% in each of the next two years.

Flood recovery Commitments under the budget for flood response and recovery include:

• $350 million for immediate assistance in cleaning up public, community and environmental properties and assets, and disposing of waste.
• $350 million for the acquisition and management of temporary and medium-term housing in approved sites to help people unable to find stable and permanent housing due to flooding.
• $312.5 million to improve the resilience of state and local transportation infrastructure to strengthen and upgrade infrastructure and assets.
• Housing and accommodation assistance, including:
  • $285.2 million for housing assistance support, temporary housing measures and housing recovery service in the event of flooding.
  • $168 million for support for social and police housing.
  • $112.5 million for Back Home Grants to help restore housing to livable condition.
• Establish the Northern Rivers Reconstruction Corporation to set and implement reconstruction priorities in the region, working closely with communities.
• A range of grant programs to help businesses, primary producers, non-profit organizations, families and individuals get back to life as quickly and safely as possible.

The New South Wales government has also announced significant funding in health, education and infrastructure over the next few years.

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