SYDNEY, AAP – The NSW government budget deficit is expected to more than double to $19.5 billion, but Treasurer Matt Kean says the state’s accounts remain structurally sound.
Mr Kean released the coalition’s mid-year budget update for the 2021/22 financial year, on Thursday.
The budget was handed down by treasurer-turned-premier Dominic Perrottet on June 22, just four days before the Delta COVID-19 outbreak forced Greater Sydney into lockdown and derailed the state’s finances.
On the updated numbers, new treasurer Mr Kean forecasts an expansion in the deficit to $19.5 million, from $8.6 billion in June, on the back of measures to offset the economic impact of COVID-19.
“But because we have structured our support package for our economy and our people in a way that is targeted and temporary … our budget remains structurally sound,” he said.
A large chunk of that money – about $7 billion – was spent on the governments JobSaver payments, which helped more than 200,000 businesses keep and pay their staff.
Some $2.8 billion has also gone into the state’s economic recovery package.
“(But) this was not an expense,” he said.
“It was an investment in our economy and investment in the health of our citizens and investment in each and every person in NSW.”
The budget is still forecast to return to surplus by 2023/24.
The state’s revenue forecasts had improved since June, with GST receipts, transfer duties and mining royalties all up, which would help cushion the blow, he said.
“What this shows is the best way to have a strong budget is to have a strong economy,” Mr Kean said.
“When our state is prosperous, when our businesses are profitable, when our people are in work and earning a good wage, the state’s finances prosper as well.”
Consumer and business confidence are also up, and while volatility remains, the outlook for the state’s finances is positive.
Mr Kean defended his government’s economic record, arguing it has “always shown strong fiscal discipline” despite the budget blowout.
“This government will always be careful with every dollar we spend,” he said.
“Whilst the last two years have been hard, and we are by no means out of the woods yet, this government’s strong health and economic management has meant that we have navigated the pandemic better than anywhere else in the world.”