The NSW budget has faced a deterioration of $1.3 billion since June, primarily due to a decline in stamp duty revenue and unexpected increases in insurance, compensation, and interest expenses. While the deficit is projected to improve by 2027-28, the government warns of potential risks from the US and China's trade policies.
The NSW budget bottom line has deteriorated by $1.3 billion since June, driven by a near half-a-billion-dollar decline in stamp duty receipts and unanticipated leaps in insurance, compensation and interest expenses. Treasurer Daniel Mookhey and Finance Minister Courtney Houssos presented the state’s half-yearly review on Wednesday, revealing the budget deficit had worsened to nearly $5 billion in 2024-25, yet was projected to improve to be just $1.3 billion in the red by 2027-28.
The update warned that US President-elect Donald Trump’s expansionary fiscal policy and broad-based tariff regime were expected to heighten global inflationary risks. This would be exacerbated if China responded with similar protectionist measures. While not disclosing if NSW Treasury had undertaken modelling about the risk of Trump’s trade policies, Mookhey underscored the state’s exposure to tremors in the global economy. “NSW makes its money from selling the intelligence of its people and its goods around the world. That’s why what happens in trade markets matters a lot to Australia and a lot to NSW,” he said. In light of the economic headwinds facing the government, Mookhey said the mid-year update was “mildly encouraging”, emphasising the $2.3 billion improvement in the state’s net debt since the budget was handed down on June 18. It was still forecast to leap from $110 billion to $140 billion by mid-2028. The government underscored a near billion-dollar increase in expenses from insurance and compensation scheme valuations, and a more than $450 million increase in interest expenses. Stamp duty receipts also fell by nearly $400 million as Sydney’s property market cooled over the back end of the yea
BUDGET DEFICIT NSW ECONOMY TRADE INFLATION
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
Budget Deficit Widens Despite 'Luck' and Government EffortsThe Australian government's budget is projected to deepen into deficit over the next four years, despite recent positive revenue surprises. The Treasurer emphasizes the need for responsible economic management and points to the impact of the war in Ukraine on budget projections.
Read more »
Budget Deficit Widens Despite Revenue GainsAustralia's budget deficit is projected to grow over the next four years, despite strong revenue performance. The Treasurer highlights the government's efforts to manage the budget responsibly while acknowledging the impact of unforeseen events like the war in Ukraine.
Read more »
Australia's Budget Deficit Widens Amidst Spending Pressures and Migration SurgeAustralia faces a growing budget deficit over the next four years due to rising spending and a surge in migration. The government acknowledges the need for tax reform, while Philip highlights concerns about the private sector's weakness and China's economic slowdown.
Read more »
Australia's Budget Deficit Widens, Migration Surge Fuels Housing PressuresAustralia's budget deficit is projected to deepen over the next four years due to rising spending pressures outweighing better-than-expected revenues. The government acknowledges challenges in areas like defense, energy, and housing, but emphasizes the need for tax reform to lessen reliance on personal income tax. The MYEFO report highlights government spending and migration as supporting the economy, while noting a weak private sector and the impact of China's slowdown. Additionally, Australia's migrant population is expected to exceed government projections by 80,000 this year, putting further strain on the housing and rental markets.
Read more »
Budget Deficit Widens as Spending Outpaces RevenueAustralia's budget deficit is projected to grow in the coming years due to increased spending exceeding revenue gains.
Read more »
Budget Deficit Smaller Than ExpectedTreasurer Jim Chalmers announced a smaller-than-expected deficit in the Albanese government's mid-year budget update.
Read more »