Newcastle, a winner in the 2013 state budget

19 June 2013 – New South Wales treasurer Mike Baird said the state was in recovery mode in his budget speech on Tuesday. He also made commitments to infrastructure, including rail; to the revitalisation of Newcastle; and funding of more than $20 million to implement  planning reforms.

But the good news comes amide the  recent welter of cuts to public service numbers including at the Office of Environment and Heritage, which manages environmental programs, previously reported in The Fifth Estate, and union concerns that front line services will also be cut.

Following are key highlights from the treasurer’s speech:

 The Budget has been set in the context of a fragile global economic outlook.

The data around us paints a sombre picture. The weak domestic economy has seen most states register zero or negative economic growth. To the north, Queensland is facing a $5 billion Budget deficit, while the best Federal Labor can manage, after a year of promises to the contrary, is a Budget $20 billion in the red. These examples show we cannot be complacent.

However, the backdrop makes even more remarkable the positive economic signs emerging in NSW. The Budget revises economic growth in 2012-13 up by one half of a percentage point, to 2.5 per cent.

Employment growth has been revised up by three-quarters of a percentage point to 1.5 per cent.

After lagging well behind the pack for a decade, NSW has moved back towards the lead. We have the highest jobs increase and, in the year to March, State demand grew faster than any state except Queensland.

NSW employment has increased by 128,900 in two years.

Housing is also on the rebound: in the April quarter, private building approvals were 26.5 per cent higher than a year ago and 14.1 per cent above the decade average. We are boosting the supply of new housing in the State and thereby delivering much-needed growth to one of the key drivers of the State’s economy.

Balance sheet

The $5 billion was received less than three weeks ago from the long-term lease of Port Botany and Port Kembla.

Net debt in June next year will be $15.7 billion, about $4.8 billion less than predicted in last year’s Budget. Indeed, net debt in 2017 will now be lower than last year’s estimate for 2014.

Newcastle

The government will proceed to a long-term lease of the Port of Newcastle, the largest coal port in the world, subject to a scoping study. The success of Port Botany and Port Kembla dictates that we act now.

Should the transaction be successful, $340 million of the proceeds will go towards the revitalisation of Newcastle.

This will be more than a revitalisation: it will be the reinvention of Newcastle as a modern city. The removal of the railway line between Wickham and Newcastle, as previously announced, will renew Hunter Street and return the city’s harbour to the embrace of its people.

The heavy rail service will be replaced by light rail. Subject to the completion of a business case, this will form the beginning of a light rail service linking the Newcastle CBD with surrounding suburbs.

In the 30-year period of the opening up of the Australian economy to international competition, perhaps no other city has been asked to make more painful adjustments than Newcastle. Today, Newcastle’s time has come.

Infrastructure

Over the four years to 2016-17, the infrastructure program will total $59.7 billion.

Reduced spending in the electricity sector to assist in putting downward pressure on electricity prices, but increasing spend in the general government sector, with money into roads, public transport, hospitals and schools.

State funding over the next four years averages $9 billion, an increase of 39 per cent over the four years to 2012-13.

Rail grants for infrastructure over the forward estimates of almost $10 billion.

North West Rail Link expected to cost $8.3 billion, with trains running in 2019.

The Government has embraced INSW’s key recommendation, the 33 kilometre WestConnex project. The recent Ports transaction has secured the funding. The Government has committed $1.8 billion across the forward estimates, including more than $100 million in 2013-14 to the WestConnex project.

A private sector plan to address the missing link, between the F3 and the M2, has progressed to Stage 3 under the Government’s unsolicited proposals assessment process. The Budget funds the Stage 3 assessment and reserves in Restart NSW a contribution of up to $400 million. If this proposal is able to proceed, it will deliver a continuous motorway between the Central Coast and Hunter and Western and South Western Sydney.

Housing

More than $300 million will be allocated for priority infrastructure to accelerate the delivery of new homes and extend the first homebuyers scheme to further boost supply.

There will be $141 million for 11 critical projects to support the delivery of up to 42,900 new homes in Sydney and the Hunter region.

This builds on the $181 million allocated in last year’s Budget across 10 projects to support 76,000 new homes. In total, this will help to deliver almost 120,000 new homes across the state.

There will be $99 million to assist councils to fund the gap between the amount developers contribute in infrastructure levies, and what it actually costs to build the infrastructure necessary to increase housing supply. Over 20,000 homes in The Hills and Blacktown communities are among those which will benefit from the scheme.

A further $70 million has been allocated to upgrade Old Wallgrove Road, which will unlock 1200 hectares of land in the Western Sydney Employment Area, supporting jobs close to homes in new growth areas.

Planning

$20 million towards implementing a new planning system.

See our separate story on this

Transport

The Budget provides a major boost to transport:

  • $4.1 billion over four years for the North West Rail Link, with tunnel boring machines due to be in the ground next year
  • $900 million this year for new Waratah trains and $142 million this year for light rail
  • funding for roads infrastructure upgrades needed to support a growing Central Coast, including construction to upgrade Wyong Road and the Central Coast Highway at West Gosford.

 Education

Capital spending of $530 million for five new public schools on the Lower North Shore, at Spring Farm, The Ponds, Strathfield and Crows Nest.

Regional NSW

  • over four years, there is $4.4 billion for the Pacific Highway and $735 million for the Princes Highway
  • of the $1.2 billion health capital works upgrades, almost a third will be spent on health facilities in the regions – in Bega, in Kempsey, in Wollongong, in Port Macquarie, in Dubbo, in Lismore
  • Restart NSW is funding $120 million for the Resources for Regions program to deliver infrastructure for communities affected by mining activities
  • the fund is also providing a $135 million contribution over four years towards Bridges for the Bush, a program for replacing and upgrading 17 bridges in regional NSW

See media Key services will be hit: unions, in The Sydney Morning Herald