NSW Treasurer Gladys Berejiklian and Premier Mike Baird at a Sydney Metro tunnel.

The NSW budget has been well-received by the built environment sector, thanks to record infrastructure investments of $73.3 billion over the next four years and a surplus of $3.4 billion expected to rise to $3.7 billion in 2016-17.

Though while praise has been high for the budget, there is also concern not enough is being done regarding climate change, the environment, affordable housing and critical infrastructure projects like hospitals.

A big win for infrastructure

Infrastructure spending was the big winner, with record infrastructure investment of $73.3 billion over the next four years, with state-funded infrastructure spending averaging $12.1 billion a year over the forward estimates.

“Overall, infrastructure expenditure in 2016-17 in health will increase by 14 per cent on this year, education by 37 per cent, transport and roads by 16 per cent, police by 59 per cent and TAFE by 76 per cent,” NSW Treasurer Gladys Berejiklian said.

“Infrastructure is driving our economy and our economy is driving the nation.”

However funding for hospitals and schools was dismissed as inadequate by the Opposition.

“Under the Baird Government it will take 45 years to deliver the new schools that are required within the next 15 years,” Opposition leader Luke Foley said.

“We see a government that in its first budget cut $270 million from school capital, put back a fraction of that… and do a lap of honour.”

While the budget provided $1.1 billion on capital works for corrective services in the next year, school capital works will see just half of this, at $550 million.

“The story of [the] budget is its Gladys the Grinch hoarding the proceeds of a property boom rather than investing them in the schools and hospitals that a growing population so desperately needs,” Mr Foley said.

Transport investment boosted

Transport investment was a big positive, with $20.2 billion to transport and roads infrastructure and services.

Public transport did well, with more than a billion dollars set aside for a new fleet of suburban trains. The budget also fully funds the Sydney Metro.

“This year’s budget fully funds the Sydney Metro City & Southwest, which has a cost range of $11.5 billion to $12.5 billion,” Ms Berejiklian said. “For 2016-17 we have allocated $1.3 billion for Sydney Metro Northwest, which is set to open in the first half of 2019, and $1.4 billion for the second stage of the metro.”

However, Dr Mehreen Faruqi, Greens transport spokesperson, said the government was privatising the rail network and failing to expand the system to “transport-starved areas”.

“We are yet to see any detailed justification for the government banking on this metro system, which will cannibalise two existing train lines,” she said.


On housing, the government said it was improving affordability by increasing supply, with home approvals now above 70,000 dwellings.

“This government has always said the key to affordability is supply and already NSW new residential construction is growing at around 23 per cent – a rate of growth unrivalled by any other state,” Ms Berejiklian said.

Mr Foley questioned whether the government was properly addressing affordable housing for key workers, however.

“The Libs have a slogan here that is just about supply. I think that’s the wrong policy. This is a clear case of market failure,” he said.

“This budget spends more money on housing prisoners [$3.8 billion] than making it affordable for nurses, teachers and paramedics to buy a home in Sydney.”

Warm welcome from industry groups

Many industry sectors welcomed the budget.

Consult Australia said it was “positive and robust”, calling on other governments to follow NSW’s lead.

“The Treasurer today delivered a positive budget for the state and for our industry,” Consult Australia president Andrew Mather said.

The Australian Industry Group called the budget “diligent, modern and non-ideological”.

The Institute of Public Works Engineering Australasia said government investment in infrastructure underpinned growth.

“This record infrastructure spending is a cornerstone of the growth in jobs, private investment and business confidence in the state,” IPWEA NSW president Warren Sharpe said.

The Urban Taskforce particularly welcomed the public transport investment it said would “underpin future urban development”.

“This enormous commitment to infrastructure will underpin the future development of more urban densities across the state but particularly in the Sydney metropolitan area,” chief executive Chris Johnson said.

Don’t mention the climate

Following in the footsteps of its Intergenerational Report, however, the government failed to mention climate change in its 2016-17 budget.

The news is in stark contrast to Victoria and South Australia, which have both set clear climate and renewables targets to help to meet the COP21 agreement.

What was announced was what Ms Berejiklian termed a “record” $1.7 billion investment in environmental measures, including “specific funding for biodiversity conservation on private land and to help local communities protect coastal and floodplain areas”.

Dr Faruqi said, though, it was a record investment perversely because “a big part of that money is to enact the so called biodiversity law reforms that will have a devastating effect on the environment and facilitate land clearing”.

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