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NSW State Budget: 2021-22

NSW State Budget: 2021-22

Simon Alford

The Honourable Dominic Perrottet delivered the New South Wales 2021-22 State Budget on 22 June 2021, focussing on COVID safety measures along with targeted spending to assist small business and large spending packages on infrastructure and disaster recovery. The expected budget position for the 2021-22 year is a deficit of $8.6 billion, which is 9.2% of forecast revenue.

The Treasurer has praised the state’s response to the pandemic, highlighting the benefits yielded by keeping the state open. In his speech, the Treasurer claimed that not only have we recovered the 270,000 jobs lost during the COVID pandemic, we have added 36,000 more. He also noted that economic activity has now surpassed pre-COVID levels.

The key points within the budget are summarised below.

COVID-19 Health response
The Government is continuing to support its vaccination rollout by adding a new centre in Newcastle in July 2021 and committing more than $260 million for vaccine distribution.

A further $796 million will be added to the state’s COVID-19 response including funding for pop-up clinics, contact tracers and testing.

CBD Revitalisation
The introduction of a $50 million new Dine & Discover voucher program which is designed to entice NSW residents to visit the CBD on Fridays. 

A further $20 million will be spent on an accommodation voucher program for use in the CBD.

The new Dine & Discover, and accommodation vouchers will be valued at $100 each. As with the current Dine & Discover program these will be accessible in due course through the Service NSW website or app.

As previously announced the current Dine & Discover program has been extended to 31 July 2021 to allow residents to use their vouchers. 

Family support programs
More than $6 billion will be spent in 2021-22 on new and existing rebates, concessions, and cost of living measures to support families which include the following:

  • Providing a $100 voucher for children aged 3 to 6 years not yet enrolled in school for swimming lessons.
  • $150 million to extend the Start Strong Free Preschool program for the school year 2022 – to provide approximately two days of free preschool per week to all eligible preschool children.
  • $333 million to introduce the Energy Social Programs to enable the provision of energy rebates to help reduce energy bills.

Small Businesses
The Government has allocated more than $500 million in 2021-22 on a range of programs to continue to support small business. These programs include the introduction and extension of the following measures:

  • $20 million for the Business Concierge service to provide small business operators with personalised support through Service NSW.
  • $9.8 million to continue the Business Connect program which provides professional business advice to small business across NSW.
  • $4.3 million for the NSW Small Business Commission to deliver increased mediation and advisory services to commercial parties.
  • 2 million for the small business fees and rebates scheme. Eligible businesses can claim $1,500 in rebates against eligible government fees and charges until 30 June 2022.

Commencing 1 July 2021, large business who contract with the NSW Government will need to pay their small business contractors within 20 business days.

Payroll Tax, Stamp Duty and Land Tax
There were no changes announced to payroll tax in the 2021-22 budget, however we note that significant concessions were afforded in this area last year with a temporary reduction in the payroll tax rate to 4.85% until 30 June 2022 and a permanent increase in the payroll tax threshold to $1,200,000, up from $900,000. 

There were no changes announced in the 2021-22 budget relating to stamp duty or land tax, however a progress paper was released earlier this month regarding the Government’s proposed property tax reforms. 

Electric Vehicles
The budget announced a comprehensive set of measures to entice the take up of electric vehicles, which includes:

  • A four-year motor vehicle duty exemption for eligible new and used, zero and low emission cars.
  • $3,000 rebate for the first 25,000 Battery Electric Vehicles and fuel cell electric vehicles sold for a GST inclusive price of less than $68,750 from 1 September 2021. This excludes public or private fleet operators.
  • 1 million commitment to upgrading charging infrastructure over the next four years to allow ultra-fast charging especially on major highways and at regional tourist destinations. 

To provide a source of road funding in the future, a 2.5 cents per kilometre road user charge for electric vehicles will be introduced from the earlier of 1 July 2027, or the time electric vehicles reach 30 per cent of new vehicle sales.

Infrastructure
The Budget commits a record $108.5 billion to the Government’s infrastructure program over the next four years. Key inclusions are:

  • $3.1 billion on health infrastructure including projects such as the John Hunter Health and Innovation Precinct, Liverpool Health and Academic Precinct, and Tweed Hospital and integrated Ambulatory Services Redevelopment.
  • $12 billion for Sydney Metro West.
  • $2.7 billion for the M6 Stage 1.
  • $2.1 billion to deliver 44 new and upgraded schools.
  • $2 billion on the Great Western Highway upgrade.
  • $1.9 billion for WestConnex.
  • In excess of $1 billion for the development of Bradfield City located near Bringelly in southwestern Sydney, including $870 million on enabling works to prepare the site and $176 million to provide the first high tech building.

Regional NSW 
Funding has been allocated toward health and economic stimulus measures designed to support regional areas including:

  • $900 million in health capital works across regional NSW including:
    • $80 million for Moree Hospital.
    • $53 million for Gunnedah Hospital.
    • $45 million for Muswellbrook Hospital Stage 3.
    • $30 million for Wentworth Hospital.
  • $246.3 million in extending the Regional Seniors Travel Card for an additional two years, providing eligible seniors with $250 each year for fuel, taxi or NSW TrainLink tickets.
  • $2 billion establishing the Snowy Hydro Investment Fund for projects in five areas which are, water security in priority catchments, investing in digital connectivity, improving passenger road and rail, freight linkages and establishing Special Activation Precincts.
  • Incentives aimed at boosting jobs and skills including $47.9 million to expand the Farms of the Future program and $79.5 million to continue the Regional Job Creation Fund.
  • The government has pledged close to $10 billion to help support farmers and their communities through recent challenges including:
    • $4.5 billion in bushfire recovery support.
    • $4.5 billion in drought assistance and water security support.
    • $590.4 million for the 2021 NSW Storm and Flood Recovery Package which includes $171.4 million for disaster recovery grants of up to $50,000 for small businesses and non-profit organisations, and grants of up to $75,000 for primary producers who have suffered direct damage.
    • $140 million in 2021-22 ($150 million over two years) for the Mouse Plague Response Program which includes $95 million for primary producer rebates for bait of up to 50 per cent of actual expenses capped at $10,000 per business. There are also rebates available through the Service NSW website of up $1,000 and $500 for small business and households respectively to help meet the cost of buying bait.