OVERVIEW

The 2024-25 Budget forecasts significant challenges ahead, including a $3.6 billion deficit, rising unemployment and a subdued economic outlook. It also highlights the fiscal shock of an unfair GST carve-up, whereby $11.9 billion in GST grant revenue was reallocated away from NSW.

Treasurer Daniel Mookhey’s second budget offers modest assistance for SMEs, as the government focuses on housing and fiscal repair.

We welcome the continuation of the $325 energy rebate for small businesses and the focus on housing delivery.

However, a decision to freeze land tax indexation will mean even more commercial land holders will be captured in this wider tax net, passing on costs to businesses. Freezing land tax indexation is effectively a $1.5 billion tax increase on businesses and landlords over the four years to 2027-28.  

 

KEY MEASURES INCLUDE:

  • A $1.5 billion tax increase on businesses and landlords via the NSW Government refusing to index land tax above the current $1.075 million tax-free threshold. This is despite inflation running at about 4%.     
  • A further $5 million (on top of the current $25 million) for the NSW Business Bureau, which offers personalised business support and guidance.  
  • Extension of the Energy Bill Relief Fund for the 2024-25 year, being $325 for eligible small businesses.  
  • Fee-free training for new apprentices and trainees will continue, at a cost of $16.3 million. 
  • $650 million for essential worker housing.
  • $201.9 million for housing infrastructure in Bathurst, Port Macquarie-Hastings, Shoalhaven, the Tweed Shire and Wagga Wagga.
  • $632 million to continue delivering new and safe housing across the Northern Rivers and Central West.
  • Nightlife and live events boosted with more than $54 million for The Office of the 24-Hour Commissioner and creative industries.

FISCAL & ECONOMIC OUTLOOK

  • NSW economic growth: Gross State Product (GSP) growth is estimated to be a modest 1.5% for 2023-24 but the forecast for 2024-25 has been upwardly revised to 2% (from 1.25% projected in the Half-Yearly Review) and growth is expected to remain at 2% in 2025-26 before further accelerating to 2.25% in 2026-27.  
  • Unemployment: The NSW unemployment rate is expected to end the financial year 2023-24 at 4% (upwardly revised from 3.75% projected in the Half-Yearly Review) and further increase to 4.5% at the end of 2024-25. 
  • Inflation: Sydney CPI growth is projected to slow from 7.1% in 2022-23 to 4.25% in 2023-24 and 3% in 2024-25. Wage growth is expected to exceed inflation in 2024-25, with wages projected to rise 3.75%. 
  • Budget result & net debt: The budget deficit is forecast to shrink from a revised $9.7 billion for 2023-24 to $3.6 billion for 2024-25. Further improvement is expected over the forward estimates, with the budget deficit narrowing to $2.5 billion in 2025-26. However, without a budget surplus in the near term, net debt is forecast to increase from $96.8 billion (11.9% of GSP) in 2023-24 to $110.5 billion (12.8% of GSP) in 2024-25, reaching $139.5 billion (14.2% of GSP) in 2027-28.


HIGHLIGHTS FOR BUSINESS

This section outlines key measures for business and also highlights Business NSW advocacy wins for the business community.

HOUSING

  • ADVOCACY WIN Build-to-rent for essential workers: $450 million will be invested in built-to-rent accommodation for essential workers, to be constructed in the next three years. Landcom will build these new apartments for essential workers to rent in areas closer to the city, their jobs, and services.
  • ADVOCACY WIN Better planning system: $555.5 million to speed up the planning system, $253.7 million of that money will be used to booster the planning system to assess more development applications, $246.7 million for enabling infrastructure, conservation activities and land acquisitions for housing in Western Sydney, and $35 million to support the NSW Building Commission.
  • Social housing: $5.1 billion to build 8,400 new social homes over four years to 2027-28. 6,200 will be new and 2,200 are replacement homes over the next four years. At least 50% will be prioritised for victim-survivors of domestic and family violence.
  • Emergency housing: $527.6 million for emergency housing and homelessness support services, including $260 million to provide crisis accommodation and support services, and $250 million to support people who are homeless or at risk of homelessness. The funding will support Specialist Homelessness Services and the Aboriginal Community Controlled sector.
  • NSW Rental Taskforce: An $8.4 million investment to establish the NSW Rental Taskforce to help achieve a fairer, quality, and affordable rental market. The Taskforce will target poor quality homes, and unethical practices by agents and owners.
  • Rural health worker accommodation: An additional $200.1 million in funding to provide a range of new worker accommodation in our regional and rural areas, which is to be delivered over the next four years.

 

COST-OF-LIVING RELIEF

A total of around $8.7 billion will be spent in 2024-25 to support households with cost-of-living pressures in housing, energy, health, education, recreation and transport.

  • Energy rebates: additional $100 million for the energy social program to support energy bill relief for up to 1 million households. From 1 July 2024, the Family Energy Rebate and Seniors Energy Rebate will increase to $250, while the Low-Income Household Rebate and Medical Energy Rebate will increase to $350.
  • Toll Relief – $60 weekly toll cap: Implemented since 1 January, eligible motorists that spend between $60 and $400 on tolls per week can continue to claim a rebate of up to $340 per week. The rebate is calculated and claimed each quarter.
  • Cost-of-living payment for public sector workers: an annual $1,000 payment if average annual Sydney CPI inflation exceeds 4.5% in the March quarter.

 

SKILLS & INNOVATION

  • ADVOCACY WIN TAFE infrastructure: $190.2 million for repairs and upgrades to TAFE facilities and digital infrastructure across the state.
  • ADVOCACY WIN Apprenticeships and traineeships: $8.9 million to continue fee-free training for apprentices and trainees.
  • School infrastructure and resources: with $3.6 billion for new schools and school upgrades in Western Sydney; $1.4 billion over four years to build new schools and upgrade school facilities in regional areas; $1.08 billion in 2024-25 for school upgrades, maintenance and refurbishment; and an additional $481.1 million in resource funding for public schools.
  • School staffing: $1.2 million in 2024-25 for the Priority Recruitment Support scheme, and $700,000 in 2024-2025 to extend the Grow your Own Local Teacher pilot program.
  • Early learning: $769 million for 100 new public preschools; $60 million for new and upgraded preschools in non-government schools; $430 million in preschool fee relief for 2024-2025; $20 million to trial the Flexible Initiatives program, promoting more flexible hours in early learning; $17.1 million to expand scholarships and development in early learning; $5.3 million Capability Development Program for small early learning providers; $20 million to expand the number of places available in community preschools; and $10 million to support capability development in early childhood education through TAFE.
  • TAFE teachers: $83.1 million over the next four years to secure ongoing employment for 500 TAFE NSW teachers.
  • Youth participation: $4.9 million to help young people re-engage with education and training.

 

ENERGY & ENVIRONMENT

  • Disaster response and recovery: A significant investment of $5.7 billion over four years to 2027-28 to help communities build resilience and recover from natural disasters. This includes $3.3 billion for restoring flood damaged roads; $2 billion towards disaster relief and recovery programs; $303.5 million to repair and rebuild water, sewerage and community infrastructure; and additional funding for new home and land options, and for social housing in flood affected areas.
  • Energy transition: $3.1 billion to deliver infrastructure providing lower cost and more reliable energy.
  • Managing biosecurity threats: $945.7 million will be invested to address biosecurity threats, including eradicating red fire ants, managing Varroa mites, boosting surveillance and preventative capabilities to tackle biosecurity risks, and further funding to continue the Feral Pig and Other Pest Management Control Program.
  • Protecting our environment: $307.2 million to improve water security for regional communities and industries, as well as improving environmental water quality, $43.0 million for the Environment Protection Authority to boost the transformation of the waste and recycling industry in NSW and $75.1 million to maintain and improve the national parks.
  • Renewable energy: Port of Newcastle will receive $128.5 million for road upgrades and infrastructure to transport equipment components for Renewable Energy Zone projects.
  • Community energy projects: $10 million will be invested to construct a solar farm in Canterbury-Bankstown.
  • Mine rehabilitation: The Government will invest $15.2 million for mine rehabilitation and closure.

 

INFRASTRUCTURE & TRANSPORT

  • ADVOCACY WIN Building Parramatta Light Rail Stage 2: To build better connected communities in Sydney’s growing West, the State Government has provisioned $2.1 billion for the delivery of Parramatta Light Rail Stage 2.
  • Sydney Metro: $13.4 billion will be allocated over four years for the continuation of the Sydney Metro West, including the potential addition of a station at Rosehill. There will also be $5.5 billion allocated for the ongoing delivery of Western Sydney Airport Metro, and $1.2 billion for the completion of the Sydney Metro City and Southwest.
  • Better buses, better services: There will be $1.9 billion allocated for a new zero emissions bus fleet. The Budget will also provide funding to deliver new dedicated bus services connecting many key areas in Western Sydney.
  • Better technology, better journeys: The Budget will provide a combined $65.0 million to improve technology in our train systems. It includes replacing the Digital Train Radio System, and expediting technology for train crews during periods of degraded operations and to enhance their ability to recover.
  • Better roads for Sydney: The NSW Government will allocate $1.0 billion to bring the total program to $5.2 billion, including matched funding from the Federal Government. This includes upgrading the Mamre Road Stage 2, widening a section of Elizabeth Drive, widening a section of Richmond Road, works on Mulgoa Road Stage 2, as well as Roads Planning works, among others.

 

SUPPORT FOR REGIONS

  • ADVOCACY WIN Road restoration work: $3.3 billion for restoration works to repair local and state roads damaged in major flood events, including in the Northern Rivers and Central West.
  • ADVOCACY WIN Illawarra Rail Resilience Plan: The government will fund the $10 million Illawarra Rail Resilience Plan to determine options to upgrade and rebuild infrastructure along the South Coast Line following extreme weather events.
  • ADVOCACY WIN Housing resilience: $632.4 million to continue delivering new and safe housing across the Northern Rivers and Central West, including $525 million to support voluntary buybacks, raisings, repairs and retrofits through the Resilient Homes Program.
  • Regional transport infrastructure: $1.4 billion to continue construction of M1 to Raymond Terrace extension and Hexham Straight Widening projects; $216.3 million to continue planning and early works on the Wyong Town Centre Upgrade  (NSW and Australian government funded).
  • Upgrading regional rail: $1.2 billion will be invested to continue delivering a new rail fleet to improve safety, accessibility, amenities and reliability of regional train journeys.
  • Regional Development Trust Fund: $400 million to focus on sustainable regional industries, First Nations economic development and enterprise, community connection and capacity building, and improving regional service delivery. An additional $50 million has been added to the Regional Development Trust, bringing this pipeline of investment across regional communities to $400 million. The first tranche of investments includes: $15 million to improve rural and remote airstrips for year-round accessibility, $10 million for Western NSW Workforce Activation package to expand and upgrade early childhood and education care across Bourke, Broken Hill and Cobar, and $5 million for an Aboriginal Economic Development Package.
  • Regional transport network upgrades: $350 million for Inland Rail Level Crossing at Parkes and Narrabri; $275 million for Nelson Bay Road to Bob’s Farm; $130 million for the Avoca Drive Upgrade; $105 million for Nowra Bypass and Network Planning; $47.3 million Jindabyne Education Campus to provide improved access to the new school facilities for local community; $10 million for Narooma Bridge Planning; and $10 million Dixons Long Point Crossing.
  • Health workforce: 250 healthcare workers including nurses and doctors as part of a $274.4 million Essential Health Services Fund provided to hospitals in Tweed, Sutherland, Cooma, Bowral, Glenn Innes, Griffith, Price of Wales, Cowra and Wentworth.
  • Hospital upgrade: $265 million to upgrade the Port Macquarie Hospital.
  • Housing infrastructure Fund in Restart NSW: Further $85 million to fast track infrastructure from Tweed Heads to Wagga Wagga.
  • Resilient Land Program: $87.4 million for the Resilient Lands Program to unlock new home and land options in safe locations in the Northern Rivers.
  • Water infrastructure: $43.1 million to support water infrastructure, reduce leaks and improve water efficiency and drought resilience across NSW.
  • Education Priority Recruitment Support Program: $20,000 recruitment bonus for schools with longstanding vacancies.
  • Relocation support package: up to $8,000 for eligible teachers.

 

SUPPORT FOR SMALL BUSINESS

  • ADVOCACY WIN Small Business Energy Rebates: The government confirmed continuation of funding of previously announced rebates on energy bills for small businesses.
  • Service NSW’s Business Bureau: is receiving an additional $5 million in funding, bringing the total to $30.0 million so it can continue to focus on delivering key programs and services for small businesses.

 

TOURISM

  • Extra funding for Destination NSW and the creation of the new Department of Creative Industries, Tourism, Hospitality and Sport as of 1 July 2024: $324.5 million is being allocated to deliver events and drive the refreshed Visitor Economy Strategy.
  • EV Charging: $20 million to co-fund EV destination charges at regional tourist destinations.

 

OTHER BUSINESS MEASURES – TAX

  • Bulk-Billing Support Initiative via payroll tax rebates: $189 million to waive unpaid payroll tax liability for contractor GP wages to 4 September 2024 and a new ongoing payroll tax rebate for contractor GPs at clinics that meet bulk-billing thresholds (80% in metropolitan Sydney and 70% in the rest of NSW). This aims to protect bulk-billing rates by reducing financial pressures on GP practices.
  • Enforcing compliance with the engineered stone ban from 1 July 2024: the NSW Government will spend $2.5 million to strengthen protections against the dangers of silicosis by spending $2.5 million enable SafeWork NSW to implement and ensure compliance with the national ban on the use, supply and manufacture of engineered stone from 1 July 2024. Funding will also be made available from the Workers Compensation Operational Fund to establish a Silica Worker Register so at-risk workers can be tracked across NSW.


For more information from Business NSW, please contact:

Ben Pike – Executive Manager, Marketing & Media: Ben.Pike@businessnsw.com