New South Wales has made significant investments in housing and infrastructure commitments as the state’s economy and fiscal position moves into recovery from COVID.

In the first budget since new Premier Dominic Perrottet took over from Gladys Berijiklian, the state has projected a fiscal deficit of $11.2 billion in 2022/23 – down from a downwardly revised expected deficit $16.6 billion in 2021/22.

The budget is expected to return to balance by 2024/25.

But the state’s net debt is expected to increase from an expected $53.5 billion or 7.8 percent of GSP in 2021/ 22 to reach $114.8 billion or 13.7 percent of GSP by 2024/25.

Meanwhile, the state’s economic recovery is expected to move into full swing, with Treasury forecasting that the state’s economy will grow by 4.75 percent in 2022/23.

From the viewpoint of the building and construction sector, important measures centre on housing and infrastructure.

On housing, the state has made significant announcements which are designed to boost housing supply and improve affordability for homeowners.

In particular, measures include:

• $780.4 million for a two-year trial of a new Shared Equity Scheme which will enable eligible buyers with a deposit of just two percent to access government contributions of 40 percent in the case of newly constructed homes or 30 percent in the case of established homes. Up to 6,000 places will be made available under the trial scheme, which will target single parents, older singles and first-home buyers who are teachers, nurses or police.
• 6 million to introduce an option for first home buyers purchasing a home for up to $1.5 million to pay an annual property tax instead of upfront stamp duty.
• $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
• Other measures, including $300m for maintenance and upgrades to 15,800 social housing properties; $174m for 271 new homes for key workers in regional and remote NSW; $89m to reduce planning and assessment timeframes; $73.5m for planning and rezoning in state led precincts; $37m for 120 social housing dwellings and $33.8m for Regional Housing Development.

On infrastructure, the budget locks in a $112.7 billion four-year investment program, including:

• $12.4 billion for the Sydney Metro West which will deliver a new underground driverless Metro line connecting Greater Parramatta with the Sydney CBD in around 20 minutes, including new metro stations at Westmead, Parramatta, Sydney Olympic Park, North Strathfield, Burwood North, Five Dock, The Bays, Pyrmont and Hunter Street in the Sydney CBD
• $8.4 billion for the Sydney Metro – Western Sydney Airport which will deliver six new Metro stations to service the future Airport and the Western Sydney Aerotropolis, interchanging with the T1 Western Line at St Marys
• $5.1 billion for the Sydney Metro City and Southwest which will deliver an extension of Sydney Metro Northwest from Chatswood, under Sydney Harbour, through new CBD stations and southwest to Bankstown
• $4.1 billion for the Western Harbour Tunnel to deliver the first stage of tunnelling works for a new crossing of the Sydney Harbour, and continued planning for Beaches Link
• $3.2 billion for the Great Western Highway Upgrade to reduce congestion and deliver safer, more efficient and reliable journeys through the Blue Mountains and better connect communities in the Central West
• $2.3 billion for the M6 Extension Stage 1 which, when completed, will remove more than 2,000 trucks a day from surface roads, enable motorists to bypass up to 23 sets of traffic lights on the Princes Highway and enhance pedestrian and cyclist safety through shared pathways
• $1.9 billion for Jervis Bay to the Victorian border to continue the transformation of the Princes Highway from south of Nowra to the Victorian border, including the delivery of the Milton-Ulladulla Bypass to improve safety, journey times and freight efficiency
• $1.7 billion for the Warringah Freeway upgrades to surface roads, bridges and interchanges along about four kilometres of the freeway corridor.

Speaking primarily of the housing announcements, Property Council of Australia NSW Executive Director Luke Achterstraat welcomed the budget and said the announcements were clear indications that the government has put housing at the top of their priorities.

“It’s great to see the NSW Government’s commitment to help Australian’s achieve home ownership and put housing front and centre,” Mr Achterstraat said.

“There is no doubt we are experiencing a housing supply crisis in NSW which is putting a strain on affordability, both in terms of ownership and rentals,” he said.

“The emphasis on assisting some of the state’s most vulnerable people through this assistance program is a well-intentioned endeavour. For many Australians, their home is their most valuable financial asset so housing security can create financial security.”

Achterstraat also welcomed the planning measures along with the funding for enabling infrastructure.

“Improving the planning system and delivering more housing supply are the biggest levers the state government has to address affordability,” he said.

“We are some 100,000 homes short of where we need to be in NSW so it is timely to support the private sector in getting on with the job of building quality homes and beautiful communities for the people of NSW.

“There is an enormous difference between land that is simply rezoned and land that is ‘development ready’ – the missing ingredient is enabling infrastructure such as water, parks and transport.

“The $300m earmarked for enabling infrastructure needs to be delivered strategically and efficiently.”