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Introduction the Liberal-National Coalition, Led by Gladys Berejiklian Has Been Returned to Government, Following the NSW State Election on Saturday

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Introduction the Liberal-National Coalition, Led by Gladys Berejiklian Has Been Returned to Government, Following the NSW State Election on Saturday The NSW Infrastructure Blue Book (Liberal-National Coalition) View the full report in your browser. Follow us on 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 Great Western Highway (Katoomba to Lithgow) and a nearly $1 billion commitment to duplicate additional parts of the Princes Highway. In the lead up to the election, the Berejiklian Government also provided an indication of the next phase of the Sydney Metro network expansion. This included a commitment to continue planning the Sydney Metro West extension from Westmead to Western Sydney Airport, 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 Warringah Freeway 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 M5 Motorway (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
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