Raising the BARR – Week ending 22/09/2023

NSW budget hastings point view
Raising the Barr

New South Wales Budget

Last week the NSW Budget was handed down. It is the first Budget of the new Government. Of course, September seems late in the year to deliver a Budget given that our financial year runs from July to June, but it is very much normal for a new Government to deliver the later Budget in their first year, given that they only got access to the “books” in April. Next year, the Budget will return to its otherwise normal timing of a June delivery.

A new Government will typically use their first Budget to re-set the role and purpose of Treasury. Their first Budget will be a change in direction for the state and a change in priorities.

Long term readers of this column will recall that I have written many times about the NSW Budget and my concerns about how it was being shaped by the former Government. The basis of my concerns were quite simple – debt was growing rapidly at the same time as assets that made profit/income for the state were being sold off.

In household terms we all need to be very careful about racking up the debt. Of course, debt has to be paid back and the household should really only take on as much debt as it can afford to pay off. It is simply not possible to keep throwing things on the credit card, extending the credit limit and then throwing more stuff on the credit card, as if there is no limit for, or responsibility to, the growing debt.

What has been made clear in recent months is this very point. And in the handing down of the NSW Budget it has been made clear that borrowing more and more and more money has to stop. Already the amount of debt that we have in NSW will require approximately 130 million dollars per week, yes, per week, in repayments. That’s $130M per week that is not being spent on our roads, or hospitals, or for improving our standards of education.

The new focus of the new Government and the new Budget is very much on delivering more housing, helping households with cost-of-living pressures and making sure that we offer better pay to our public servants so that they will (hopefully) stay in their roles. And, very importantly, steps have been taken to start paying off some of the state’s debt and to significantly reduce the need for taking on any more debt.

It is clear now the previous Government was borrowing more and more money to splash around in their own electorates, to try to keep winning elections. And even after all of this borrowing they were still making even more announcements about more spending that was unfunded. At the time of the election, they had made a further 7,000 million dollars worth of promises that they had no money for.

The new Government, in the Budget, has shut down many of these buckets of borrowed money, as well as the unfunded buckets, to get NSW back toward living within its means. Taxpayers’ money needs to be carefully handled and spent in a precious way. And I am all for that.