The New South Wales government is expected to unveil $1bn in cuts and deliver a $2.1bn surplus in its first budget since being re-elected in March.
The treasurer, Gladys Berejiklian, will deliver her first budget on Tuesday, and the government has indicated the surplus would be $1.8bn bigger than forecast in December.
Most of the new revenue has been reported as coming from commonwealth grants and stamp duty, as Sydney’s property market continues to boom, but exactly where the cuts will be made is not clear.
The already confirmed 1.5% efficiency dividend to be placed on all departments means the government can attempt to keep at arm’s length decisions on where to make cuts as it attempts to save more than $500m across portfolios.
Policies the government has chosen to promote ahead of the budget include an extra $400m in the housing acceleration fund to try to ease housing affordability, and the establishment of a planning commission to bypass council approvals for buildings. There will also be a $235m racing tax cut.
The budget will also reveal how the government is handling cuts in federal funding for health and education, which in NSW equate to $2.5bn each year from 2017. They have been a point of contention between state and federal governments since first unveiled in the 2014 budget.
The state and territory leaders will meet the prime minister in July for a “retreat” where they will attempt to thrash out an agreement.
“This budget is the result of four years of hard work and the people of NSW are benefiting,” Berejiklian told the Daily Telegraph.
“When we came to government, we had a bloated bureaucracy and an unsustainable budget, unable to provide the infrastructure and services that NSW needed. Importantly, unlike Labor, windfall tax revenues are not squandered on wasteful spending, unplanned projects or bloating the bureaucracies.”
Berejiklian did not appear before the media on Monday, but was interviewed by the premier, Mike Baird, in a video posted on his Facebook page.
Greens NSW MP John Kaye said Baird’s “obsession” with delivering budget surpluses was weakening the state’s long-term economic performance.
“The Baird government is racking up a series of surpluses like trophies on the wall,” he said on the eve of the budget.
“What they’re not doing is providing services for the people of NSW. The government is sitting on a pile of money to appease the rating agencies and the investment banks.
“It would be better spent on critical services like education.”
The budget will be delivered on Tuesday afternoon.
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