NSW defends cash splash while other states repair finances

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NSW defends cash splash while other states repair finances
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NSW Treasurer Matt Kean has shrugged off criticism of a big-spending NSW Budget arguing that now is the time to leverage the state’s strong financial position

NSW is the only state where forecast accumulated deficits are worse than six months ago and is the only state nationally to have gone backwards since their midyear budget updates.

Analysts have praised the budget for its vision, forward-thinking and generally targeted approach to spending. But the magnitude and pace of spending including $71 billion in new commitments has alarmed others who questioned its assumptions and potential to drive inflation. “By not showing a degree of restraint there’ll be higher interest rates as a result of the [NSW] budget, there’s no doubt about that,” Mr Hamilton said.

“I still think it’s fairly conservative because a lot of the reforms they’ve put in place will pay back dividends,” SP analyst Martin Foo said, describing initiatives including a $5 billion childcare plan as a “foundational policy” which will drive growth in the future.But the analyst questioned the prediction that gross state product would grow by 4.25 per cent in the next year.

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