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NSW budget: The property boom that just keeps on giving
It's the boom that just keeps on delivering.
Once again, the real estate fervour that has swept the nation's most populous state has delivered a bonanza to the New South Wales Government.
Not that you can find the exact number in the accounts delivered this morning by Treasurer Dominic Perrottet.
So embarrassing are the riches bestowed upon the state by stamp duties flowing from what many believe is a property bubble, the revenue this year was wrapped up into "transfer duties" that included duties from the sale of some state assets such as the poles and wires businesses.
It's forecast to keep on growing, by around 6 per cent each year for the next three financial years. That's a mighty big chunk of the state's total revenue of $78 billion.
You can understand why the Government has become so shy about property. No Treasurer or Premier wants to project the idea they simply are coasting along on the coat tails of a boom. And to be fair, the Berejiklian government is managing the state's boom time finances with aplomb.
By resisting the urge for reckless spending for political gain, NSW has found itself not only with a strong economy and an operating surplus, but with a balance sheet that shows not just zero debt, but money in the bank.
It is a boom that increasingly is worrying everyone from the Reserve Bank to the Federal Treasury, especially when combined with our world record levels of household debt.
Not that you can find the exact number in the accounts delivered this morning by Treasurer Dominic Perrottet.
So embarrassing are the riches bestowed upon the state by stamp duties flowing from what many believe is a property bubble, the revenue this year was wrapped up into "transfer duties" that included duties from the sale of some state assets such as the poles and wires businesses.
It was only after repeated requests that Treasury officials quietly distributed the numbers on photocopied pages.
Stamp duty on residential property soared almost 10 per cent to $6.8 billion.It's forecast to keep on growing, by around 6 per cent each year for the next three financial years. That's a mighty big chunk of the state's total revenue of $78 billion.
You can understand why the Government has become so shy about property. No Treasurer or Premier wants to project the idea they simply are coasting along on the coat tails of a boom. And to be fair, the Berejiklian government is managing the state's boom time finances with aplomb.
By resisting the urge for reckless spending for political gain, NSW has found itself not only with a strong economy and an operating surplus, but with a balance sheet that shows not just zero debt, but money in the bank.
On every count, NSW is outperforming its peers; economic growth, employment, debt and revenue.But just as Western Australia had its mining boom, NSW's rude financial health largely is driven by housing construction, in part due to a series of drastic cuts in official interest rates which now sit at a record low of 1.5 per cent.
It is a boom that increasingly is worrying everyone from the Reserve Bank to the Federal Treasury, especially when combined with our world record levels of household debt.
Since 2012, when the Reserve Bank began slashing rates, NSW housing completions have risen from 28,000 a year to 60,000 now. If the government forecasts prove correct, the construction boom will peak next year at around 75,000 completions.
Unlike WA, which emerged from the greatest resources boom in history with its finances in a shambles, the Premier hopes that infrastructure projects — funded through asset recycling rather than a massive uptick in debt — will continue to drive the economy through to the next decade.
(Source: Australian Broadcasting Corporation)
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