A record infrastructure spend has been announced as part of the New South Wales 2019-2020 budget, but the softening housing market has taken its toll — wiping billions in expected stamp duty revenue.
The record spend sees more than half go toward road and rail, as the cash splash shows the total spend of $55.6 billion for road and transport projects taking the state's overall infrastructure investment to $93 billion.
Funding for major projects under way includes the WestConnex, Metro City and Southwest, with state treasurer Dominic Perrottet saying the state’s growing debt was “manageable”.
In what Perrottet describes as a “state building budget”, the infrastructure spend will be delivered amid a lower-than-expected surplus of $802 million.
This figure is down from the $1.4 billion a year ago.
Stamp duty revenue has been written down by $10.6 billion since 2017 as state government predicts housing price growth over the next few years to be in line with inflation.
Stamp duty was the state’s largest source of tax revenue, making up 31.4 per cent in 2016-17. Budget papers expect stamp duty revenue to fall to 21.6 per cent in 2019-20.
The New South Wales government had also been hit with a $2.3 billion write-down in expected GST revenue over the next four years.
Sydney rail project Metro West will receive $6.4 billion over four years.
The $25 billion project, which still needs to secure funding, plans to double the existing rail capacity between Parramatta and Sydney CBD and cut travel times between Parramatta and the city to 20-minutes.
Construction on Metro West is slated to commence next year, with the schedule for the project to be confirmed on completion of the final business case.
Western Sydney is a big winner in the budget, with plans for the Parramatta Light Rail to receive $561 million, and the Northern Road upgrade between Narellan and Penrith $404 million.
“Right now the economic headwinds are picking up, but we are taking steps to keep our economy strong,” Perrottet said.
As for road projects in regional areas, northern NSW's Pacific Motorway will get a $1.5 billion upgrade, and $1.2 billion will be spent on the M1 Princess Highway.
The surplus $802 million projected for 2018-19, averages $1.7 billion over the four years to 2022-23.
Property Council NSW deputy executive director William Power said the budget reflects "tightened purse strings".
“It’s great news that there are no new taxes or tax increases given the downturn in the residential market,” Power said.
“A commitment to a long-term strategy for new sectors such as build-to-rent will also ensure there is counter-cyclical investment in the residential sector, further strengthening revenue streams.”
The state announced plans to spend $10 billion on building and upgrading health infrastructure and $7.3 billion for education across the next four years.