NSW Budget: We’re rolling in it
Dominic Perrottet: This year enjoying strong returns on sometimes controversial asset recycling
New South Wales Treasurer Dominic Perrottet’s first budget has revealed a set of books in embarrassingly rude health, confirming a surplus for the current financial year of $4.5 billion, with a further forecast surplus of $2.7 billion for 2017-18.
And from there, its average surpluses of $2 billion a year as far as the eye can see, which in the case of the forward estimates is four years.
That’s before reckoning in the $15 billion that the Treasurer says NSW is being stiffed by the Feds over the next four years under the current GST sharing arrangements. Yep, in NSW we’re rolling in it.
When the Treasurer helpfully provided budget lock-up journalists with a check-list of NSW Government financial achievements, it was a surprise to no-one that all the boxes were ticked.
And that was the point of this budget. In the big picture, it’s all about highlighting the asset recycling program that has funded big infrastructure investments in schools and hospitals, roads and bridges.
In fact, this budget could have been entirely about bridges: Mr Perrottet says the $73 billion record infrastructure investment over the next four years would have allowed the NSW Government – had it chosen to do so – to build 124 Sydney Harbour Bridges.
Luckily for us someone put the kibosh on the extra bridges. Instead we got schools, hospitals and significant additional spending on both its own digital service delivery agenda, and at support programs for the broader innovation sector.
The numbers taken through the macro lens are enough to give you vertigo. Don’t go into Budget Paper No. 3 without a friend is my advice.
As you would expect in a public sector budget from a state that accounts for more than 40 per cent of the national economy, there is a lot going on at project level.
The Perrottet budget has boosted general spending on ICT, digital and innovation within the Finance, Services and Innovation portfolio by more than 11 per cent to $268 million, and more than doubled capital expenditure.
The big ticket capital boost comes in the form of $178 million in funding over two years to accelerate the delivery of improvements to the state’s critical communications networks used by emergency services, law enforcement and essential community services.
Service NSW gets an additional $20 million to complete its network of service shopfronts with the transitioning of 24 Motor Registries in regional areas into Service NSW service centres.
Service NSW also received an additional $13 million in 2017-18 to build out its underlying digital capability and transaction on-boarding to expand the range and the depth of its services.
And additional $9.4 million has been allocated to building out the Service NSW new business portal, which aims to enable inter-government transactions to be made through a single site when starting a business.
The project is currently in pilot in Parramatta and targets people starting a bar, café or restaurant, and lets the business owner carry out all transactions – from liquor licenses to ABN numbers – through a single site regardless of which jurisdiction has responsibility for a specific transaction.
Mr Perrottet also outlined $8.5 million in funding to develop and start rolling out a digital driver’s licence for NSW. This is something of a Holy Grail object for digital aficionados – a foundation identity document that includes a pre-existing biometric identifier (a photograph).
The digital driver’s licence is one of the key projects to watch in NSW – although there are many – largely because it could provide a foundation digital identity for accessing government and non-government online services in future as part of a ‘federated’ identity model.
The budget also provides for $17 million next financial year (and funded from the existing levy on insurance Green Slips) to be spent on improving the regulatory activities in support of the new compulsory third party scheme.
You can expect the government to be talking up the compulsory third party scheme to underline its ongoing investment in digital delivery. It is already indicating through the budget papers a scheme that costs road users less for a green slip, but which delivers a greater proportion of premiums to injured road users.
Finance Minister Victor Dominello said this week that regulators had been working within the NSW Government Data Analytics Centre (DAC) to identify fraud activity within the scheme, which he said cost drivers as much as $75 per green slip.
The budget forecasts that the digital improvements to compulsory third party insurance – including better fraud detection measures – will reduce the cost of green slips as a percentage of average weekly earnings from 36 per cent this financial year to 30 per cent in 2017-18.
At the same time as the cost per green slip is reduced, the government is forecasting that the percentage of CTP premiums paid to injured road users will jump from 47 per cent in the current financial year to 57 per cent in the next.
Industry development programs for the startup and technology innovation sectors have been given steady as she goes funding, although the regions should expect to see continued strong increases.
Jobs for NSW remains the central platform for targeted programs aims at growing the startup, scale-up and innovation sectors in the state, receiving $96 million in 2017-18 to support high potential businesses.
This funding includes $25 million to launch a co-investment vehicle with the private sector, to enable Jobs for NSW to make equity investments in growth companies across the state in partnership with others.
A further $20 million has been allocated to fund the Sydney Startup Hub, where incubators and accelerators and various other hanger-on can commune, fostering collaboration and building employment-heavy new companies.
The budget also promises $10 million for the development of collaborative programs between industry and universities, and that leverage the benefits of the new airport in Western Sydney. This includes the establishment of a new entity – Defence NSW – to promote the state’s interests in this booming industry.
The Office of the Chief Scientist and Engineer gets $14 million in 2017-18 for its Research Attraction and Acceleration Program to leverage external funding, particularly in NSW universities, for high impact research.
The regions also benefit from a $65 million investment over ten years for a research and development project with Grains Research and Development to extend research services into winter crop development – through agronomy, physiology and pathology services – and to build out infrastructure and skills.
And as if somebody were reading the taxpayer’s mind – with all this money sloshing around – an additional million dollars per year goes to support the Innovation and Productivity Council to conduct research and develop advice for government on priorities for boosting innovation in the state, focused on small, medium and regional businesses.