The 2022-23 NSW State Budget was handed down by Treasurer, Matt Kean on 21 June 2022.
A budget deficit of $11.3 billion is projected for 2022-23 reflecting the level of investments made in the health system to improve capacity and resilience, continuing support for COVID-19 and flood response. It is expected that Government expenditure will decrease as stimulus payments are phased out and the economy continues to rebound. It is expected that the State will return to surplus by the 2024-25 financial year.
The budget focuses on easing cost of living pressures along with a commitment by the State to ensure more affordable housing. We have listed some of the measures announced below.
Housing – Removal of stamp duty for first home buyers
Eligible first home buyers will be given an option of either paying stamp duty upfront or paying an annual property tax when purchasing their first home for up to $1.5 million. The new annual property tax will be calculated as $400 plus 0.3% of the unimproved land value of the property. The choice to opt into this scheme will be available from 16 January 2023. Where contracts are exchanged in the period between the enactment of legislation and 15 January 2023, eligible first home buyers will be able apply to opt in and receive a refund of stamp duty after 16 January 2023.
Housing – Shared Equity Scheme
$780.4 million for a two-year trial of a shared equity scheme for up to 6,000 eligible single parents, older singles and first home buyers who are teachers, nurses or in the police. Under the scheme, the NSW Government will pay a proportion of the purchase price of a property in exchange for an equivalent ownership share of the property. The NSW Government equity contribution is up to 40% of the purchase price of a new dwelling and up to 30% of the purchase price of an existing dwelling. The purchaser must have a minimum deposit of 2% of the purchase price, with no lenders mortgage insurance required. No repayments are required on the equity contribution and no rent or interest will be charged while a participant remains eligible for the scheme. Participants can make voluntary payments to progress to full ownership of their property. Full details around this scheme and the eligibility requirements can be found here.
Housing – Other
Other measures in relation to housing include:
- $300.0 million for a third round of the Accelerated Infrastructure Fund, including $120.0 million for regional areas, to co-fund critical housing-enabling infrastructure.
- $300.0 million for maintenance and upgrades to more than 15,800 social housing properties, extending the life of social homes and ensuring tenants have safe accommodation.
- $174.0 million for 271 new homes for key workers in regional and remote New South Wales.
- $149.8 million for 200 new and 260 upgraded homes for First Nations people, as well as 4,400 climate-resilience and energy-saving upgrades, helping to reduce overcrowding and improve the quality of life for tenants.
Cost of Living
In this budget, new measures introduced amount to $2.2 billion over four years and include:
- Toll Rebate Scheme where, every quarter, eligible non business and small business customers will receive a 40% cash rebate for every dollar spent on tolls once they have reached a minimum of $375, saving NSW drivers up to $750 per year
- Brighter Beginnings Affordable Preschool initiative to provide fee relief for families with children across the community and mobile preschool and long day-care sectors.
- Back to School Subsidy, providing $150 to every NSW school child towards the cost of school supplies in 2023.
- Energy Bill Buster program over eight years to help eligible households reduce their gas and electricity bills by providing technology solutions, including solar panels and high-efficiency appliances.
- Two-year pilot of a $250 prepaid Regional Apprentice and Uni Travel Card for university students and apprentices in regional New South Wales each year to ease the cost of travel.
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:
- $192.0 million Parents NSW program to reward and thank eligible NSW households for their efforts to support learning from home in 2021
- $155.0 million Before and After School Care program, providing a $500 voucher towards the cost of before and after-school care for every child in New South Wales
- $130.0 million Mental Health and Wellbeing package
- $66.2 million Alfresco Restart Package and $50.0 million CBDs Revitalisation Program to bring the streets of New South Wales back to life with outdoor dining, live music and entertainment
- A range of regional projects, including $40.0 million for priority regional infrastructure.
Investing in Women
The NSW Government will invest in significant reforms to make New South Wales the best place in Australia for women to live, work and raise a family. Up to $5.0 billion (over 10 years) will be invested to establish the Affordable and Accessible Childcare and Economic Participation Fund, which is part of a package of early childhood education and care reforms, including universal pre-kindergarten and affordable preschool. It is estimated that this will increase women's workforce participation and increase economic activity in New South Wales (Gross State Product) by between $4.7 billion and $17.1 billion per year by 2032-33.
In relation to business owners, the Government has announced the following funding:
- $12.0 million to establish the Carla Zampatti Fund (a women's venture capital fund) to support female entrepreneurs and small business owners, including $10.0 million for the Fund and $2.0 million for establishment and operation.
- $9.5 million for dedicated support for female business owners through Service for Business and Business Connect programs.
Public sector employees
The Government 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 frontline of the COVID-19 pandemic. In addition, an increase in remuneration to public sector employees of 3.0% in each of the next two years.
Flood recovery Commitments within the budget in relation to flood response and recovery include:
- $350 million for immediate clean-up assistance for properties and public, community and environmental assets, and waste disposal.
- $350 million for the procurement and management of temporary and medium-term housing in approved sites to support people unable to secure stable, ongoing accommodation because of the floods.
- $312.5 million to deliver state and local government transport infrastructure resilience improvements to reinforce and upgrade infrastructure and assets.
- Housing and accommodation support, including:
- $285.2 million for rental assistance support, temporary housing measures and a housing flood recovery service.
- $168 million for social and police housing support.
- $112.5 million for Back Home grants to help restore housing to a habitable condition.
- Establishing 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, not-for-profit organisations, families and individuals return to their lives as quickly and as safely as possible.
The NSW Government have also announced significant funding in health, education and infrastructure over the next few years.
This article is issued as general commentary - please contact us about your specific circumstances.