NSW Treasurer Daniel Mookhey recently declared a surplus by 2024-25 will be a difficult target to achieve following the June Economic Statement. Budget projects have seen significant blowouts and tough decisions will have to be taken to counter inflation.
Mookhey cited inflation as the pre-eminent economic trial for the State; therefore, he has committed to tightening spending.
The Treasurer effectively quashed hopes of achieving surplus as February figures showed a $6.492bn deficit for NSW in 2023-24. In addition, the forward estimates indicated a meager $333m surplus for 2024-25, with an expectation to expand to $1.166bn in 2025-26.
The Treasurer has blamed rising inflationary pressures for substantially increasing the cost of maintaining and replacing the state’s assets from $27bn to $30bn. A new Treasury analysis has revealed that costs to preserve these assets such as hospitals, roads, and schools will add “hundreds of millions” to the state’s balance sheet from July 1.
“Inflation is making it costlier to restore all of the state’s roads, schools, hospitals, and the other assets which are necessary to offer essential services,” he said.