NSW residents have been warned that robust choices will should be made, together with cuts to authorities spending, because the state grapples with a “once in a generation cost of living crisis”.
NSW Treasurer Daniel Mookhey mentioned he can be “candid with the people of NSW” when he delivers the June Economic Statement to parliament on Tuesday earlier than he palms down the 2023-24 funds on September 19.
Speaking to reporters on Monday, he mentioned the “situation is serious”, with the federal government coping with $7bn of bills and “hard to avoid pressures”.
Among these included $380m to resume contracts for 1100 nurses which can be set to run out in 2024 and a $669m invoice to NSW’s public sector insurance coverage scheme icare.
“I am going to be upfront about the fact that the state’s finances are facing serious pressure,” Mr Mookhey mentioned.
“As a result, this government is facing serious challenges and there are no easy decisions ahead.
“NSW has not experienced inflation with a seven in front of it since the 1970s.”
Treasurer lashes former wealth fund
On Monday, the Treasurer mentioned he can be pausing funds to the previous authorities’s NSW Generations Fund (NGF).
Initially, the scheme was arrange with $10bn of presidency funds, together with the $7bn sale of WestConnex. The Coalition authorities supposed to borrow a further $25.3bn by 2027 into the scheme’s Debt Retirement Fund (DRF) to assist repay future debt.
While the preliminary plan for the DRF was created when rates of interest had been lower than 1 per cent, borrowing charges have now elevated to about 4 per cent.
Mr Mookhey mentioned the debt inaccurately inflated the funds, making it appear “healthier than it is”. The cash within the funds additionally can’t be used on infrastructure tasks or to pay public sector wages.
“We are in effect putting $25.3bn at risk so we can improve the state’s net debt position by just $2b,” he mentioned.
“Swelling the size of the DRF with debt makes the budget look healthier than it needs.”
The authorities will additional examine the DRF previous to the September funds, with the fund referred to the higher home’s state improvement committee for overview.
“It is the job of the parliament to shed light on this,” he mentioned.
“It’s also the job of the parliament to reach a collective decision about whether or not this is a risk to the NSW balance sheet.”
Could NSW lose triple-A credit standing
NSW’s financial place might hamper its two triple-A credit score rankings and the state’s future borrowing capability.
When requested whether or not he was “worried” about dropping the monetary accolade, Mr Mookhey mentioned it was “under immense pressure”.
NSW Premier Chris Minns mentioned robust choices wanted to be made for the state to “pay our bills”.
“We have to take steps to ensure that we can pay our bills, that we’re in a strong economic position,” he mentioned.
“It’s one of the leading reasons why we’re taking decisions about protecting taxpayer money and ensuring that to the extent possible, we live within our means.
“We can’t spend as if it’s a Covid year when it’s not a Covid year.”
While shadow treasurer Damien Tudehope conceded “some economic repair” was required popping out of Covid measures, he mentioned cuts shouldn’t be made to price of dwelling measures.
On the NSW Generations Fund, Mr Tudehope mentioned the opposition would maintain the federal government to account and it shouldn’t droop contributions.
“The suspension of contributions to the fund is like suspending contributions to our own superannuation funds. No one would do that,” he mentioned.
Source: www.perthnow.com.au
