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State Budget

Published on: June 2025

Record: HANSARD-1323879322-154631

State Budget

Mr DAVID MEHAN (The Entrance) (17:00:00):

I move:

That this house:

(1)Notes that the 2025-26 New South Wales budget sees a $5 billion year‑on‑year improvement in the State's operating budget—the most significant year‑on‑year fiscal consolidation on record for New South Wales and putting us on the path to surplus.

(2)Notes that the New South Wales Labor Government's focus on reducing debt has meant that our State has the lowest debt of any State except for Western Australia, and our State now saves more than $400 million in annual interest payments compared to the former Coalition Government's budget.

(3)Supports the new $1.2 billion child protection package, which will provide more support for children and young people in out-of-home care.

(4)Supports the Government's new $1 billion Pre-Sale Finance Guarantee, which will fast‑track up to 15,000 homes over the next five years.

(5)Supports the additional $10.4 billion investment from the New South Wales and Federal governments to fully fund our public schools.

(6)Supports the $12.4 billion of capital investment to build and upgrade health infrastructure over the next four years, with $3.3 billion in 2025-26.

The 2025-26 budget continues the work of this Labor Government to rebuild the essential services people rely on, to build homes for the people of New South Wales and to lay the foundations for economic growth. To be clear about the facts, the Minns Government inherited a budget in disrepair. Members opposite left New South Wales saddled with the largest debt in the State's history. By comparison, back in 2011 the incoming Liberal-Nationals Government was delivered a gross State debt of $22 billion. By 2023, when Labor returned to government, debt had ballooned to $130 billion. According to the pre-election budget update, we had to deal with a budget deficit of over $12 billion and budget settings that would see gross State debt reach $188 billion by 2026.

The reality is that the Minns Labor Government inherited a budget position that reflected serial and compounding deficits going all the way back to 2018, which was the last time that this State had a surplus. Members opposite had a whole bunch of opportunities to return the budget to surplus, which they never took. In 2018 the budget was in surplus. In 2019 we had a $7 billion budget deficit. That was before the pandemic. In the 2020-21 budget, we had a $7 billion deficit. In the 2021-22 budget, there was a $15-billion-plus deficit. In the 2022-23 budget, according to the pre-election budget update, there was a $12 billion budget deficit. Those were the two largest budget deficits ever delivered by any government in the history of the State.

What did Labor members do? In our first budget, we trimmed the $12 billion deficit that we inherited down to $10 billion. In our second budget, we cut it to $5 billion, which is less than half the deficit position we inherited. Today's budget slashes that deficit to $3.4 billion. Treasury estimates that the budget will return to surplus by the 2027-28 financial year. Gross debt is projected to be $178 billion by June 2026, which is more than $9 billion lower than the 2023 pre-election budget update estimate of $188.2 billion. Bringing the State back to a sustainable position takes pressure off our interest costs, which is really important. It gives us $400 million to invest in the essential services that the people of New South Wales told us they want, need and deserve. That is what budget repair looks like.

How did we do it? We did it by having a fantastic Treasurer, Daniel Mookhey, reducing waste and reinvesting in the must-haves. We did it by having a Minister for Finance of the calibre of Courtney Houssos, and her comprehensive expenditure review. Watch out, waste! Some $13 billion in savings were identified, with 60 per cent already delivered in the short term of this Government. All our work is underpinned by our commitment to Labor values to get debt under control so that we can invest in the public services that the people of New South Wales want, rely on and deserve. Going forward, expenses growth is projected to average 2.4 per cent per year over the next four years, which is down from 6.2 per cent under the former Government.

The DEPUTY SPEAKER (Ms Sonia Hornery):

Order! There is too much audible conversation. The member for The Entrance will be heard in silence.

Mr DAVID MEHAN:

That is real restraint. Member should note how 2.4 per cent lies within the 2 to 3 per cent inflation bounds that the Reserve Bank talks about when it talks about its concerns for State governments adding to inflation by excessive expenditure growth. We are keeping it under that top band, taking pressure off inflation to help with the cost of living. Revenue is projected to grow more than 3 per cent, which is a sustainable position. Expense is below 3 per cent and revenue is above 3 per cent. That is a sustainable position going forward to take us back to surplus, according to Treasury. Only Tasmania has lower expenses growth. Our gross State debt to gross State product ratio is lowest amongst all the States.

The DEPUTY SPEAKER (Ms Sonia Hornery):

Opposition members will come to order.

Mr DAVID MEHAN:

This is good stuff. We have done it without privatisation and without a cap on the wages of our public servants. It is really something to behold. We have a capital program that is just as ambitious as the one that members opposite used to crow about—$30 billion in this budget—and ambition going out in the forward estimates. No wages are capped; public servants are getting real wage increases.

The DEPUTY SPEAKER (Ms Sonia Hornery):

The member for Dubbo and the member for Tamworth will leave the Chamber if they wish to continue their conversation.

Mr DAVID MEHAN:

We are doing that while keeping expenses below 3 per cent, with 2.4 per cent over the forward estimates. That is a position to be proud of. It is a position that a Labor government, or any party that has the privilege to be in government, can be proud of. I am proud to be part of the Minns Labor Government, which is delivering for the people of New South Wales and getting the budget back under control. Only Labor governments are committed to delivering the services that the people of New South Wales need and desire, and to getting the budget under control in such a way that rewards our workers and delivers for the community. I commend the motion to the House.

Ms FELICITY WILSON (North Shore) (17:07:00):

The people of New South Wales will be as exhilarated by the contribution of the member for The Entrance as they are by the flaccid budget presented today. The budget of the Minns Government takes record revenue from the pockets of the people of New South Wales and fails to find a vision for the future of this State. A round of applause for Labor today on its spin fest for the 2025 budget because, as usual, it is a day of reannouncements, blame games and fudged numbers. It is the same old Labor party that could never be trusted to run our State's economy. We now have three budgets in a row that show the true colours of Government members: They have zero vision for the future of New South Wales. The facts today are astounding. While Labor MPs crow about the supposed good news of their surplus, the facts show that even though revenue continues to rise—that is the hard-earned money of New South Wales residents and taxpayers in their GST, stamp duty and payroll taxes, by the way—this Labor Government's debt is rising even higher.

Net debt under the Minns Labor Government will increase by 43 per cent. It is all there, in black and white, in its own budget papers. Members opposite should read them before they respond, but they just harp on their talking points. Gross debt will reach the highest level this State has ever seen, at almost $200 billion. While they roll in all that extra revenue from taxpayers' money, what are they spending it on? Are they building new metros? They loved the Liberal metros so much that they must be building more of them. No—not until 2040 at the earliest. People should look out for ongoing rail and bus reliability failures, with their 20.7 per cent cut to transport funding in the budget. Are they fixing our hospitals and healthcare system? No. Health spending has been cut by 4.5 per cent.

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