Industry groups have largely praised the NSW Government budget handed down today, despite a deficit blowout.
Treasurer Matt Kean has announced a deficit of $16.6 billion for the current year, reducing to $11.3 billion next financial year, with a return to surplus expected in 2024/25.
The focus on immediate support in pressure point areas while maintaining a commitment for much needed reform are the hallmarks of the NSW Budget, according to Business NSW.
"It’s easy to forget some of the dramatic economic circumstances we’ve faced over the past three years, and the Government’s economic management has meant NSW is in a strong financial position," Business NSW Chief Executive Daniel Hunter said.
“From the outset, it must be noted that NSW is the envy of every State in Australia and is the number one State in which to be operating a business.
“The Government is confident the Budget can return to surplus by 24/25 but that will take solid financial management considering the debt levels and the vast spending measures detailed in this Budget.
“Businesses are expected to contribute more than their fair share, with payroll tax receipts expected to reach almost $12.8 billion annually by the end of the forward estimates, overtaking stamp duty as the Government’s largest source of revenue."
Hunter said looking forward, greater tax reform will be needed to navigate inflationary pressures.
“While we have been great supporters of the Government’s payroll tax reform and relief during COVID, our members will be challenged when the payroll tax rate increases from 4.85% to the pre-pandemic level of 5.45% from 1 July, with an estimated additional $2.3 billion to be collected from businesses over the forward estimates.
"This pressure adds to the rising inflation and energy costs and labour shortages faced by business.
“This Budget contains a series of measures to address key cost of living measures as well as reforms in areas such as housing affordability, childcare accessibility and education performance, all areas which have been neglected for too long."
The Australian Retailers Association (ARA) has also welcomed the NSW Government's spending on social reform, with significant investments to boost childcare and women’s workforce participation in this year’s State Budget.
The ARA confirmed support for families to address the rising cost of living was vital, with more than $7.2 billion in financial support.
CEO Paul Zahra said despite the ongoing economic challenges, with rising inflation impacting businesses and consumers, the Budget contains some positive initiatives that sets NSW up well for the years ahead.
“The economic fallout from the pandemic and the floods has taken its toll, with deficits forecast for the next two years, however the state is poised to bounce back well with economic growth of 4.25% predicted over the next financial year,” Zahra said.
“We applaud the strong focus on women in this year’s Budget. As an employer of choice for women, retailers warmly welcome the initiatives to boost childcare, as well as supports for women in small business and other measures to boost women’s workforce participation.
“Governments across the country must do more to work with industry to help increase workforce participation and address gender inequality. With the measures announced today, NSW is clearly leading the way and the ARA looks forward to collaborating with government to support many of these targeted initiatives.
“With the rising cost of living impacting family budgets, we’re pleased to see over $7.2 billion in financial supports to help people make ends meet. A significant portion of this will naturally flow through to retail and help stimulate the economy.
“The main handbrake on retail recovery and growth is labour and skills shortages. We hope the additional investment to train 70,000 people will help alleviate the staffing issues many are facing, in particular in hairdressing and other areas of retail experiencing acute labour and skill shortages.
“Retailers are also looking to governments for greater leadership on climate action to help with their own sustainability initiatives. The NSW Government’s commitment of $1.2 billion to establish a Transmission Acceleration Facility will fast track the transition to renewables and to the low-carbon economy of the future.
"In the coming years, we would like to see deeper collaboration within sustainability initiatives between highly impacted industry areas such as retail, government and the innovation community and will continue our discussions with government on that front.
“Despite some intense challenges, the NSW Budget contains bold reforms and investments that sets NSW up for a bright future.”