Media Room

NSW Budget 2015-16


Today, Treasurer Gladys Berejiklian delivered the 2015-16 Budget.

Ms Berejiklian revealed that a surplus of $2.058 billion for 2014-15 had been achieved, up $300 million from the Half Yearly Budget Review released last December, and predicted surpluses each year over the budget and forward estimates period totalling $10.571 billion.

The Budget bottom line has been boosted by an increase in forecast revenues of $1.3 billion, driven by a number of factors, including stronger than expected revenue from transfer duty receipts from the booming Sydney property market as well as GST payments. These windfall gains are to be reinvested into the Government’s infrastructure fund, Restart NSW.

Notwithstanding the Budget result, subdued growth in the Australian and international context poses continued challenges and will be felt through weaker demand for our exports. Nowhere has this been seen more clearly than in the decline in mining royalty revenue. Continued expense restraint and fiscal discipline is being applied, with the Government to continue to drive efficiencies where possible. All of the commitments made by the Liberals & Nationals at the 2015 general election are being delivered, offset against savings.

The Government is using its strong budget position to bring forward key infrastructure election commitments, with $68 billion to be invested in a range of projects over the budget and forward estimates period, before the $20 billion expected to be generated from the poles and wires lease transactions is factored in.

With the fiscal repair of the Budget all but complete, NSW is now living within its means. Moreover, the scale of the infrastructure program outlined affirms NSW’s position as the engine room of the Australian economy.

The Bottom Line

2014-15 (revised)

2015-16 (budget)

2016-17 (estimate)

2017-18 (estimate)

2018-19 (estimate)


2.50 %












6.00 %


5.75 %









* Average across 2017-18 and 2018-19
** Budget outcome after reconciliation of the impact of the creation of the Transport Asset Holding Entity (TAHE).

Key Initiatives

  • $68.6 billion will be invested in infrastructure over the four year forward estimates period – the bulk to be spent on rail and road projects.
  • Roads and Transport will be the primary beneficiary, with $38 billion allocated, including $1.7 billion towards building Westconnex, a further $1.4 billion towards the duplication of the Pacific Highway between Hexham and the Queensland border, $977 million towards the Sydney Metro NorthWest, $120 million towards the CBD and South East Light Rail and $51 million to continue delivering NorthConnex, in addition to a $224 million initial contribution to the project.
  • $5 billion will be invested in the Health portfolio on major hospital upgrades, redevelopments and expansions, as well as new and upgraded ambulance stations, including $72.1 million for the next stage of the Westmead Hospital redevelopment, $30.2 million for the next stage of the Lismore Hospital redevelopment and $30 million for Blacktown and Mt Druitt Hospitals.
  • $2.1 billion has been set aside for new schools and training facilities over four years, including $456 million set aside this year for schools. New schools will be established at Bella Vista, Narellan, the Old Kings School site at Parramatta and a Networked Specialist school in Dubbo.
  • $641 million has been allocated to social and affordable housing projects.
  • Funding for a new 600-bed Northern Region Correctional Centre at Grafton and a 400-bed expansion of Parklea Correctional Centre has also been set aside.
  • The Government is bringing forward $591 million as part of the $20 billion Rebuilding NSW commitment to begin planning projects and start construction.


Total revenue for 2015-16 is expected to be $72.1 billion, which is considerably stronger than estimated in last year’s Budget. The windfall gains above the original forecasts – driven by the 7.6 per cent growth in transfer duty this year – will be transferred into Restart NSW and used to finance critical infrastructure, such as projects from the Housing Acceleration Fund (HAF), NorthConnex, Parramatta Light Rail and Bridges for the Bush. The Government estimates that total revenue will grow by an average of 2.8 per cent per annum to 2018-19.

Payroll Tax

Payroll tax is forecast to grow by 5.7 per cent per year over the forward estimates.  Growth in both employment and wages is forecast to strengthen as the pace of economic growth increases.

Grant Revenues

This year, the Government expects to receive $28.7 billion – or 40 per cent of its total revenue – in Commonwealth untied payments and tied grants (such as National Agreements and National Partnerships, which must be used for particular purposes). While revenue from these grants is expected to grow by an average of 2.1 per cent per annum over the forward estimates, growth will fall in the out years (2017-18 and 2018-19).


Around 95 per cent of royalties revenue comes from coal in NSW. Royalties in the four years to 2017-18 are expected to be around $1.1 billion less than expected last year. This is due to lower coal prices which have been partially offset by a lower Australian dollar. However with a forecast growth in coal export volumes, the Government expects average annual revenue growth from royalties to be 12.4 per cent this year and 12.1 per cent over the forward estimates.


GST payments to NSW in the four years to 2017-18 are estimated to be $1.2 billion lower than was expected in last year’s Budget. This year, NSW will receive GST revenue that is $897 million less than its population share. Victoria and Western Australia will also receive less than their population share of GST revenue, while the other States will receive revenue in excess of their population shares. NSW has long argued for changes to the methods of implementing fiscal equalisation, such as by using a per capita distribution with the Federal Government providing equalisation funding to the smaller States. NSW and the other States have suggested that the method of GST distribution be reviewed as part of the White Paper process on the Reform of the Federation.


Total expenses for 2015-16 are estimated to be $69.6 billion, growing on average by 2.8 per cent over the forward estimates. The Government is fully funding its election commitments through savings measures including a 1.5 per cent whole-of-government efficiency dividend, procurement savings and initiatives to eliminate duplication, while a major service delivery reform in the 2015-16 Budget is the establishment of a TAHE will reduce expenses by $447 million over the budget and forward estimates.

A combination of initiatives by the Liberals & Nationals since elected to Government in 2011, including its public sector wages policy, the labour expense cap, and changes to its excess employees policy, have driven employee expenses growth to historic lows.

Budget Centrepiece

The centrepiece of the 2015-16 Budget is infrastructure investment, supporting job creation, improved services and housing affordability.

Beyond the record infrastructure spend in the Budget, the Government’s key priority is the delivery of the $20 billion Rebuilding NSW initiative to be funded from the poles and wires transactions. The Government has set aside $590.6 million to accelerate the planning and commencement of key road and rail projects.

Around $397 million has been committed over four years to help create 150,000 jobs, grow local businesses and attract new business. A new Small Business Employment Incentive Scheme will be created for non-payroll tax paying small businesses that create new jobs. From 1 July, businesses with wages below the current payroll tax threshold of $750,000 may apply for a grant of up to $2,000 when they hire new employees.

A Jobs of Tomorrow Scholarship Fund will also be established to provide 25,000 scholarships for students undertaking qualifications for technology and growth jobs, and $32 million has been set aside to encourage interstate and international businesses to relocate to NSW.

As mentioned previously, the Government is delivering its 2015 election commitments with offsetting savings that result in a positive impact on the budget over the forward estimates. The commitments will result in an additional 3,500 full-time equivalent frontline health positions, including 2,100 nurses and midwives and 700 doctors. In addition, 310 police will be employed.

The Government will also reserve an additional $400 million in Restart NSW for the HAF – which was created in 2012 and provides funding for critical growth infrastructure projects in priority growth areas – to support new housing supply and address the challenge of housing affordability.  Windfall tax revenue received from the current property boom will be allocated to the HAF (through Restart NSW) in order to productively impact the State’s housing supply.

Infrastructure spending over the next four years

The Government will invest $38 billion in the transport sector over the next four years, including:

  • $487 million for the Princes Highway;
  • $448 million for Western Sydney Growth Roads;
  • $265 million for the Great Western Highway and Bells Line of Road;
  • Implementation of the WestConnex Motorway project;
  • $1.7bn for Western Sydney roads to support Sydney’s second airport at Badgerys Creek;
  • $5.7 billion for the Sydney Metro Northwest (formerly called the North West Rail Link
  • $159 million for Fixing the Trains;
  • $84 million in planning for the Sydney Metro City and Southwest (formerly called Sydney Rapid Transit); and
  • $563 million for the next generation of the intercity rail fleet.

In Health, $5 billion has been set aside for capital works over the forward estimates, including provisions for hospital upgrades, redevelopments and expansions, and new and upgraded ambulance stations.

A further $2.1 billion has been allocated for capital works projects in the education portfolio, and $2.4 billion set aside for social and affordable housing projects.

Capital investment in water and electricity infrastructure totals $12.1 billion in the four years to 2018-19, including:

  • $7.8 billion for energy projects to ensure a reliable electricity supply, meet forecast demand and maintain and replace assets as required, as well as deliver essential distribution and transmission networks upgrades.
  • $4.3 billion has also been allocated to water and wastewater projects, including $743 million for growth works to service urban development across Sydney, the Illawarra and the Blue Mountains ($743 million) and upgrades for dams, fishways and reservoirs.

The Regions

Restart NSW funds a range of high priority infrastructure projects designed to improve the State’s economic growth and productivity, with 30 per cent of total allocations directed to regional and rural projects. Expenditure commitments from Restart NSW earmarked for regional communities include:

  • $39.3 million for Fixing Country Roads;
  • $44.7 million for the Western NSW Freight Productivity Program;
  • $85 million for the Regional Freight Pinch Point and Safety Program;
  • $127.4 million for Water Security for Regions;
  • $8 million for Resources for Regions further investments; and
  • $15.3 million for Regional Health Infrastructure.

More Information

The 2015-16 Budget papers can be downloaded here.

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