The NSW Infrastructure Blue Book (Liberal-National )

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These are the key election commitments you should know from the Berejiklian Government. Check out our three minute Infrastructure Blue Book video.

NSW ELECTION 2019

Introduction The Liberal-National Coalition, led by Gladys Berejiklian has been returned to Government, following the NSW State Election on Saturday. This marks the third term of the Liberal National Coalition in Government and the first election Gladys Berejiklian has won for the Liberal Party since the party came to power in 2011.

Necessary project updates will be made progressively to infrastructurepipeline.org over the coming days.

As of publication the Liberal-Nationals Government has won a combined 46 seats, the Labor Opposition has won 35 seats, the Greens three seats, with three seats going to the Shooters Fishers and Farmers Party and three to independents. There are still three seats undecided in NSW’s 93 seat lower house.

The re-elected Berejiklian Government will continue its focus on infrastructure investments across all sectors, with a record $87 billion program of transport, school and hospital infrastructure over the next four years.

The re-election will also see stability and growth in the major project pipeline, particularly in roads. With the Coalition returning to Government, three keystone toll road projects, the Western Harbour Tunnel, Beaches Link and the F6 Corridor that would have been scrapped under the Opposition, will now proceed.

In addition, the Berejiklian Government has made a $4.5 billion ten year commitment towards the duplication of the (Katoomba to Lithgow) and a nearly $1 billion commitment to duplicate additional parts of the .

In the lead up to the election, the Berejiklian Government also provided an indication of the next phase of the Metro network expansion. This included a commitment to continue planning the Sydney Metro West extension from Westmead to Western , and the City and South West Metro extension from Bankstown to Liverpool.

Major commitments were also made across social infrastructure, including $1.3 billion towards the Bankstown- Lidcombe Hospital Redevelopment, $780 million for John Hunter Hospital Redevelopment, and $750 million for Royal Prince Alfred Hospital.

Critically, the State’s infrastructure pipeline remains supported by a strong fiscal and economic outlook, driven by prudent financial management and the highly successful asset recycling program.

Figure 1: Key priorities of the Berejiklian Government

Projects

Sydney Metro

Sydney Metro West between Sydney CBD and Parramatta ($6.4 billion over four years)

Sydney Metro – Western Sydney Airport ($2 billion over four years)

Sydney Metro City and Southwest – Sydenham to Bankstown line conversion ($1.5 billion)

Western Harbour Tunnel and Beaches Link

The Western Harbour Tunnel will connect from Rozelle rail yards to the in northern Sydney

The Beaches Link involves a tunnel linking the Northern Beaches to the Warringah Freeway and connecting across the Harbour through the Western Harbour Tunnel to WestConnex. The 2018-19 NSW Budget allocated $556.2 million over the forward estimates towards planning and early works for both projects

A further $549 million was allocated to enabling works for the Western Harbour Tunnel in the 2018-19 NSW Budget Half-Yearly Review

F6 Corridor Stage 1 Extension ($2.2 to $2.6 billion)

Stage 1 of the F6 will see twin four kilometre tunnels link the new (being constructed as part of WestConnex) at Arncliffe to President Avenue at Kogarah

The F6 is a missing link in the Cumberland Motorway Scheme between the M1 Princes Motorway at Loftus and the Sydney Motorway Network

Great Western Highway Duplication ($4.5 billion over 10 years)

The 10-year program of works will see 31 kilometres of the Great Western Highway duplicated between Katoomba and Lithgow by 2028

Health infrastructure

Bankstown-Lidcombe Hospital redevelopment ($1.3 billion)

John Hunter Hospital redevelopment ($780 million)

Royal Prince Alfred Hospital redevelopment ($750 million)

Children’s Hospital at Westmead Stage 2 ($619 million)

Education infrastructure

Non-government schools funding for classrooms and upgraded facilities ($500 million)

Air conditioning for 1,000 public schools ($500 million)

Further school maintenance backlog funding ($449 million)

Sporting and cultural infrastructure

The existing ANZ Stadium will be refurbished into a rectangular stadium ($810 million)

The Sydney Football Stadium will be demolished and rebuilt as a new 40,000-45,000 seat rectangular stadium ($729 million)

The Powerhouse Museum will be relocated to Parramatta in Western Sydney ($645 million) Economic and Fiscal Overview

The Pre-election Budget Update (PEBU), released in early March, confirms the State’s strong economic and fiscal position and highlights the importance of public investment in infrastructure for NSW.

The 2019 PEBU provides an update on the fiscal and economic position of NSW since the 2018-19 Half-Yearly Review, released on 18 December 2018. An overview of the fiscal and economic outlook of NSW and the key risks to the budget position are outlined below.

Economic outlook

Despite strong economic fundamentals, challenging conditions in the NSW housing market are having a negative impact on consumer spending and dwelling approvals.

The challenging market conditions have prompted a 0.25 per cent downward revision to NSW’s economic growth from 2.75 per cent as at the Half-Yearly Review, to 2.5 per cent in the PEBU. The State’s economic growth rate is expected to remain steady over the coming years (see Figure 2 below).

Figure 2: Economic performance and outlook

Source: NSW Treasury, 2019

The public sector will remain a key source of strength for the economy with a record construction pipeline and good conditions for business investment and exports. Strong public demand is creating positive spill-over effects for the private sector while greater economic integration with Asia, a weaker Australian dollar, and elevated commodity prices are encouraging for the longer-term outlook.

Labour market conditions continue to be strong in NSW. In January 2019, employment increased by more than double its average rate of growth through the year. Unemployment is now at its lowest level in NSW in more than four decades and is the lowest of all the Australian states and territories (Figure 3 below). Furthermore, labour force participation stands at a record high, at over 65 per cent. Figure 3: NSW unemployment rate (trend, January 2019)

Source: NSW Treasury, 2019

Fiscal outlook

NSW enjoys a strong fiscal position with the FY2018-19 fiscal surplus projected to be $846 million and negative net debt of $8 billion expected by June 2019.

Although NSW expected a solid fiscal surplus of $846 million, this is $273 million lower than estimated in the Half- Yearly Review (see Figure 4 below).

Revenue for FY2018-19 is projected to be $81.3 billion, down $477.3 million since the Half-Yearly Review, mainly due to a revised outlook for stamp duty revenue. Stamp duty revenue has been revised down by $393 million for FY2018-19 (part of a downward revision of $747 million out to FY2021-22). Residential transaction volumes in FY2018-19 are expected to be 19.5 per cent lower than the previous year. However, transaction volumes are expected to recover around mid-2021.

General government expenses are forecast to be $80.4 billion for FY2018-19, $203.9 million lower than expected in the Half-Yearly Review. However, over the four years to FY2021-22 expenses have been revised up by $359.4 million. Figure 4: General government operating position and outlook

Source: NSW Treasury, 2019

Since the Half-Yearly Review, the Government has made a number of decisions to spend from existing Restart NSW reservations and the Snowy Hydro Legacy Fund. These include $257.6 million in Restart NSW grants to local governments to improve regional roads and $14.8 million from the Snowy Hydro Legacy Fund for scoping studies for projects in regional NSW.

Increases to capital expenditure in the general government sector included funding for backlog maintenance in schools, which increased by $161 million to $288 million since the Half-Yearly Review.

However, the general government capital expenditure profile also shows some decreases, including $257.6 million over four years, reflecting the transfer of the Regional Rail Fleet project expenditure from the general government sector into the public non-financial corporations sector. Furthermore, $31.8 million of expenditure for the WestConnex Stage 3B project was reprofiled to the FY2023-24 outer year.

When adjustments to revenue and expenditure are viewed together, over the four years to FY2021-22, the budget surplus is expected to average $1.3 billion per year. This four-year average remains consistent with the projection in the Half-Yearly Review, despite revisions in the individual years (as shown in Figure 5 below).

Figure 5: Budget surpluses compared to the 2018-19 Half-Yearly Review

Source: NSW Treasury

The State’s net debt is estimated to be negative $8 billion by June 2019, against the projected negative $7.7 billion in the Half-Yearly Review (see Figure 6 below). Figure 6: Lowest net debt of all states and territories, estimated for June 2019 (a)

Risks

The most immediate risks to the State’s economy centre around falling house prices, particularly at a time when household debt levels are high and income growth is modest. With lending standards tightening, increasing uncertainty around consumer spending and dwelling construction have implications for financial stability.

Stamp duty revenue has already fallen for the State with residential transaction volumes in FY2018-19 expected to be 19.5 per cent lower than the previous year. Transaction volumes are forecast to return to trend levels by middle of 2021.

The PEBU also observed that since health and education make up a large proportion of the public sector spend, if there were to be an increase in demand for these services - or if the Commonwealth Government were to decrease their contributions for these services – may result in increased fiscal presume on the budget.

Increasing demand for public transport services may also result in additional expenditure for the budget. Transport patronage growth is averaging five per cent per annum, which is exceeding the population growth rate. Despite the NSW Government’s significant investment program in public transport, there is a risk that the high patronage growth rate will create additional expenditure risk for the budget in the future.

Over the coming years, a number of expenditure challenges could emerge such as the growing costs associated with the delivery of large projects, changes to the cost of government services, and responding to demographic pressures of an increasing population.

Budget impact of Coalition policies

The NSW Parliamentary Budget Office estimated the impact of costed policies announced by the Coalition prior to the Election (see Figure 7 below). The estimated impact on the Net Operating Balance is negative $752 million over the four years to FY2021-22 ($5.1 billion to $4.3 billion). Figure 7: Movements in general government net operating balance

Source: NSW Parliamentary Budget Office, 2019

The impact of the Coalition’s capital expenditure announcements would see an increase of $6.6 billion over the four years to FY2021-22. Figure 8 below shows a list of costed policy announcements across the transport and social infrastructure sectors.

Figure 8: Coalition general government capital expenditure costings

Source: NSW Parliamentary Budget Office, 2019 Transport

The Coalition’s transport program sees significant investment continue across road and rail infrastructure. Key projects are targeted at reducing road congestion and improving public transport links to Sydney’s high growth areas.

Rail

In rail, the Coalition’s major commitments centre around the Sydney Metro program, with funding committed to both the Sydney Metro West and Sydney Metro - Western Sydney Airport Rail projects. Additionally, the Coalition has announced it will introduce a $50 weekly cap for public transport.

Project Description Funding committed

An underground metro line built between Sydney CBD and Parramatta. The Coalition has committed an additional $3.2 billion to accelerate the project, brining total funding allocated to $6.4 billion.

Construction of the project will be accelerated to start in 2020. Sydney Metro West $3.2 billion

There will be stations at Westmead, Parramatta, Sydney Olympic Park, North Strathfield, Burwood North, Five Dock, The Bays Precinct and the City. Further stations are also being considered between Olympic Park and Parramatta, and at Pyrmont.

The Coalition will provide funding towards the first section of the Western Sydney Airport rail project. This will see a new rail line run from St Marys to WSA and the Aerotropolis.

Sydney Metro – The broader project is estimated to cost between $15 to $20 $2 billion over four Western Sydney billion. years Airport

In March 2019, the Federal Coalition Government committed $3.5 billion towards the broader project. The project has bipartisan support.

The Sydenham to Bankstown rail line will be upgraded to Sydney Metro City convert it for Sydney Metro services. and Southwest - Sydenham to $1.5 billion The upgrade is expected to be completed by 2024. Bankstown line conversion The full project cost is $1.5 billion.

Sydney Growth Trains Under the ‘More Trains, More Services’ program a further 17 $900 million Contract Extension new Waratah Series 2 trains will be built. This is in addition to (17 New Waratah the 24 already in delivery. Rollingstock) The additional trains are expected to enter service in 2020.

The contract includes ongoing maintenance for the trains.

Under the Fast Rail initiative, $295 million will be provided to the following projects:

$125 million for the duplication of the rail line between Berry and Gerringong, plus extra platforms at Bomaderry

$80 million for preliminary work on a new straightened $295 million over four Fast Rail route between Menangle and Yerrinbool years $80 million to develop a new rail alignment between northern Sydney and Woy Woy, including investigations for major tunnelling works, and

$10 million for initial work on the route to the Central West, including options for crossing the Blue Mountains.

The Coalition has committed $1 million towards strategic Tweed Light Rail planning of light rail between Tweeds Heads and Coolangatta $1 million (strategic planning) Airport.

The Coalition has announced that they will continue planning four additional Sydney Metro routes including:

Westmead to Western Sydney Airport (extension of Sydney Metro West) Four additional metro routes Western St Mary’s to Rouse Hill via Schofields and WSA to Sydney Macarthur (extensions of Sydney Metro Western Sydney Airport), and

Bankstown to Liverpool (extension of Sydney Metro City & Southwest).

Road

The Coalition’s road investment program will see several major new road projects progress including the Western Harbour Tunnel and Beaches Link, as well as the F6 Corridor Stage 1 Extension. Funding has also been provided for road upgrades in regional areas and towards asset and technology improvements aimed at reducing congestion

Project Description Funding committed

Great Western The 10-year program of works will see 31 kilometres of the $4.5 billion over ten Highway Duplication Great Western Highway duplicated between Katoomba and years Lithgow by 2028. Construction will commence in the next term of government on upgrades between Katoomba and Mount including:

Medlow Bath upgrade Mount Victoria Bypass to Little Hartley to Forty Bends

The project will connect the missing link between the Cumberland Motorway Scheme between the M1 Princes Motorway at Loftus and the Sydney Motorway Network.

F6 Corridor Stage 1 The project involves twin four kilometre tunnels, new $2.2-$2.6 billion Extension intersections and the widening and upgrading of existing roads.

The NSW Government already committed $1.2 billion for the project in its 2018-19 NSW Budget.

The Coalition’s Regional Roads Package provides funding for road and bridge upgrades.

The package includes: Regional Roads A $500 million Fixing Local Roads program to repair, Package (local roads $1.54 billion maintain and seal roads and bridges) A $500 million Fixing Local Bridges program aimed at replacing timber bridges in regional areas The transfer of 15,000 kilometres of council-owned road assets to the State

The Western Harbour Tunnel and Beaches Link will see construction of a north-south motorway connecting the northern beaches with WestConnex.

Western Harbour The 2018-19 NSW Budget allocated $556.2 million over the Tunnel and Beaches $1.1 billion forward estimates towards planning and early works for the Link Beaches Link and Western Harbour Tunnel projects. A further $549 million was allocated to enabling works for the Western Harbour Tunnel in the 2018-19 NSW Budget Half-Yearly Review.

Princes Highway The Coalition has committed an additional $960 million towards $960 million Duplication the Princes Highway Duplication.

The funding will go towards:

Duplicating sections of highway from Jervis Bay Road to Sussex Inlet Road Building the Moruya Bypass Planning for the Milton and Ulladulla Bypass, and Planning of upgrades from Burrill Lake to Batemans Bay.

This funding commitment is in addition to $1.5 billion of work already underway on the Princes Highway, such as the Albion Park Rail Bypass and Berry to Bombaderry upgrade.

The Coalition has committed $695 million towards technology aimed at reducing congestion. Initiatives include:

$400 million to install intelligent traffic lights at 500 Congestion Busting intersections $695 million Technology Package $200 million to upgrade major motorways to automatically manage speed limits and control traffic flows, and $95 million to trial digital parking and clearway signage.

The Coalition has committed $450 million to remove 12 pinch Removal of Sydney points across Sydney to address traffic congestion. $450 million Pinch Points

The Coalition has committed $387 million to complete the next Central Coast section of duplication of the . This will see $387 million Highway Duplication delivery of an upgrade between Bateau Bay and Wamberal.

The Coalition has committed $300 million for road upgrades to arterial roads in Prospect and Kellyville. and Memorial Avenue $300 million The project involves the duplication of both the Prospect Upgrades Highway at Blacktown and Memorial Avenue at Kellyville.

Widening of Mulgoa Road from four to six lanes is already underway between Union Road and Museum Drive. This has been jointly funded by the Federal and NSW governments. Mulgoa Road

Upgrade (Western The Coalition has committed a further $260 million for the next $260 million Sydney) phase of this jointly-funded work, which will see the expansion of the road between Jeanette Street to Glenmore Parkway and Jamison Road to Blaikie Road.

Mamre Road will be upgraded along a 3.8 kilometre section to a Mamre Road Upgrade four-lane between the and $220 million (Western Sydney) Erskine Park Road

The Coalition has committed a further $205 million for the Nelson Road Nelson Road duplication project from Williamtown to Bobs Farm. Duplication from $205 million Williamtown to Bobs $70 million was already allocated to the project for planning, Farm development and early works in 2015.

Other Transport

Project Description Funding committed

Active transport The Coalition has committed an additional $197 million towards $197 million (walking and cycling) new walking and cycling infrastructure projects across the State.

This election funding commitment takes the total active transport commitment to $330 million over 5-years. A further $285 million will be spent on active transport as part of other major infrastructure projects.

One of the first projects to be funded in the next term of Government will be the Eastern Suburbs link, which will improve the bicycle route between Bondi Junction and Sydney’s CBD.

Social Infrastructure

Furthering NSW’s strong social infrastructure pipeline, the Coalition has announced funding for the redevelopment of a range of hospitals, as well as maintenance and upgrades for schools. The return of the Coalition Government will also see significant investments in cultural infrastructure, including the redevelopment of ANZ stadium and the Sydney Football Stadium, and the relocation of the Powerhouse Museum.

Health

In health, key commitments include funding for a range of hospital redevelopments, including Bankstown-Lidcombe, John Hunter and Royal Prince Alfred hospitals.

Project Description Funding committed

The Bankstown-Lidcombe Hospital will be redeveloped on a new site.

Bankstown-Lidcombe The redeveloped hospital will include enhanced emergency, $1.3 billion Hospital Redevelopment critical care, medical and surgical services. There will also be expanded and integrated ambulatory care services, including cancer treatment and community health services.

John Hunter Hospital will be redeveloped to enhance John Hunter Hospital comprehensive healthcare in the Newcastle region. $780 million Redevelopment Improvements will be made to emergency medicine, with cancer care and surgical services to be developed on a new site. Royal Prince Alfred The Coalition has committed $750 million to the redevelopment $750 million Hospital of RPA Hospital.

The redevelopment will include expansion of the Emergency and Imaging departments and the expansion of operating theatres and integration of ambulatory care services.

The Stage 2 redevelopment will include a new Paediatric Services Building and refurbishment of the existing facilities.

The Stage 2 upgrades follow the $95 million Stage 1 Children's hospital at redevelopment of the Children’s Hospital at Westmead, which is $619 million Westmead Stage 2 currently underway.

Early construction works on Stage 2 are expected to commence in 2020.

The Coalition has committed $479 million to redevelop Ryde Ryde Hospital Hospital. The redevelopment will include enhanced emergency, $479 million critical care, inpatient, ambulatory care and maternity services.

The Coalition Government has committed $450 million to fund Stage 2 of the Nepean Hospital Redevelopment. Nepean Hospital $450 million Redevelopment Stage 2 Stage 2 will focus on supporting the aging population with the planning process to investigate specialist services such as cardiac and respiratory services.

The Coalition has committed $428 million to transform cancer care and expand the Sydney’s Children’s Hospital at Randwick Comprehensive with a new Emergency Department among other additions. Children's Cancer Centre and The $428 million will be supplemented by a $100 million $428 million redevelopment of the commitment from the Federal Government, $30 million from the Children's Hospital at University of , $25 million from Sydney Randwick Children’s Hospital Foundation and $25 million from the Children’s Cancer Institute for a total of $608 million.

The Coalition has committed $385 million to upgrade the St St George Hospital $385 million George Hospital.

Manning Base Hospital The Coalition Government has committed an additional $20 $20 million upgrade million in the 2018-19 Budget for the redevelopment of Manning Base Hospital to $40 million.

The additional funding will include the fit out of the Medical Imaging Department as well as improvements in the patient waiting areas. Work will commence in the first half of 2019.

Education

The return of the Coalition Government will see continued spending on education infrastructure. In the 2018-19 NSW Budget, $6 billion was allocated over four years towards new and upgraded schools and educational facilities.

The Coalition built on this commitment in the lead up to the Election with funding announcements for maintenance programs and upgrades at both public and non-government schools.

Funding Project Description committed

The Coalition will invest $500 million in additional classrooms Non-Government $500 million over and upgraded facilities for private and religious schools over four Schools Funding four years years.

Air Conditioning for 1,000 The Coalition has committed to install air conditioning in 1,000 $500 million over Public Schools schools over a five year period. five years

The Coalition has committed a further $449 million for maintenance projects across the State’s 2,200 schools by July School Maintenance 2020. $449 million Backlog

The additional funding brings the total investment for school maintenance backlog program to $1.3 billion.

The Coalition will build a new TAFE campus in Western Sydney. TAFE campus in $80 million Western Sydney Locations under consideration include Greater Penrith, Greater Leppington and Bringelly.

Other social and cultural infrastructure

Across other social infrastructure sectors, the Coalition will progress with major stadium redevelopments, the relocation of the Powerhouse Museum and a range of projects focused on public and green spaces.

Funding Project Description committed

ANZ Stadium The Coalition had initially wanted to demolish and rebuild the $810 million Redevelopment ANZ Stadium but have since committed to refurbish the existing stadium instead.

The final business case is currently being developed by Infrastructure NSW with construction expected to begin in late 2019 and completed in 2021.

The Coalition has committed to the knock down and rebuild of the stadium.

Sydney Football Stadium $729 million A 40,000-45,000 seat rectangular stadium will be built on the site with demolition already started. The new stadium is expected to be completed in 2022.

The Coalition has committed to relocate the Powerhouse Museum to Parramatta in Western Sydney. New Powerhouse $645 million Museum Procurement is expected to start in the second half of 2019 with construction to begin in 2020. The new museum is expected to open in 2023.

Open Spaces and Green The funding package will see delivery of up to 120 projects $290 million Sydney Package aimed at creating more open and green spaces across Sydney.

The Coalition will deliver major upgrades in places like the Royal Improved Access to $150 million National Parks National Park and in the Blue Mountains to improve accessibility.

The Coalition will provide $150 million for new and improved parklands across urban areas.

Public Parks and Spaces $150 million $50 million will be used to turn existing Government-owned land into new and upgraded parks. A further $100 million will be used to secure new parks to be developed across Sydney.

The Coalition has committed $100 million to build new police Police Station Upgrades stations in Bega, Goulburn and Jindabyne and upgrade Bathurst $100 million and Bourke as well as a new police training facility in Dubbo.

The Coalition will spend $18 million to rebuild the façade of the Queanbeyan Courthouse Queanbeyan Courthouse and integrate it with the new police $18 million station. Utilities

The Coalition has made several policy commitments in the energy and water sectors. In energy, this includes a long-term emissions target of zero and support programs for solar and battery installation. Election commitments in the water sector are focused around water security projects for drought effected areas of regional NSW, as well as the raising of Warragamba Dam.

Energy

Headlining the Government’s energy announcements is the Liberal Party’s target of zero net emissions for NSW by 2050.

The Coalition has also announced the 10-year Empowering Homes program. The program will provide no-interest loans of up to $14,000 to install solar and battery systems across circa 300,000 households in NSW. In addition, a further $20 million of funding has been announced for the Emerging Energy Program, which aims to work with the private sector to co-fund circa 400 megawatts of new large scale, dispatchable renewable energy capacity.

Along with support for new solar and battery installations, the Coalition has committed $10 million for a new recycling fund for solar panels and battery systems.

The Coalition also plans to progress 24 pumped hydro projects, which would have a total generation capacity of 7,000 megawatts. The projects will see pumped hydro installed on a range of dam assets owned and operated by the State’s bulk water supplier, WaterNSW.

The Government’s Energy Switch service, which was launched in November 2018 will also be expanded under the Coalition to include household gas from May 2019.

Water

The Coalition has committed $1.4 billion for water security upgrades in regional NSW, which will include investments into dams, weirs and water pipelines. The first project announced under the water security initiative will be the $650 million raising of Wyangala Dam. The Nationals have also highlighted a range of other priority projects under assessment including:

Lostock to Glennies Creek Pipeline Hunter Water to Singleton Pipeline Gin Gin Weir, and Lake Rowlands to Lake Carcoar Pipeline.

The regional water security initiative also includes fast-tracking of 12 regional water strategies which would be delivered by 2020.

The Coalition has also committed to raise the Warragamba Dam wall by 14 metres, to mitigate the risk of flooding in extreme weather events. The project is estimated to cost $670 million and would be completed by 2024. In the lead up to the Election, the Labor Opposition opposed the project.

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