Date posted: 23/06/2021

NSW State Budget 2021-22 overview

The New South Wales Budget focuses on keeping people safe, boosting the economic recovery, innovation, investment and reform.

In brief

  • The NSW Budget contains record investments in infrastructure and healthcare
  • Other funding highlights include cost of living relief, regional assistance, electric vehicles, digital services and technologies
  • The Budget forecasts a deficit of A$8.6 billion, with net debt to rise to A$63.2 billion

The New South Wales Budget, one year on from the deepest recession in 80 years, forecasts above trend economic growth of 3.25% in 2021-22.

Employment is currently at 5% and is expected to fall to 4.5% by 2024-25. 

Signalling a move from recovery to transformation, the Budget delivered by Treasurer Dominic Perrottet on 22 June includes phasing out stamp duty for electric motor vehicles, planning, and reform to increase home ownership.

Record investments are earmarked in infrastructure and health, including transport and road safety, mental health and palliative care.

There is more support to ease the cost of living pressures for families and additional ongoing support for small businesses as well as significant investment in digital services and technologies.

The Budget forecasts a deficit of A$8.6 billion in 2021-22, with a return to surplus of A$0.5 billion in 2024-25.

Net debt is estimated to rise to A$63.2 billion in 2021-22, reaching A$103.9 billion by 2024-25.

Infrastructure

Job creation remains a key focus, with a record A$108.5 billion infrastructure investment over four years. This includes A$71.5 billion over four years to increase public transport services and reduce road congestion.  This investment supports significant projects such as WestConnex and Sydney Metro, the Sydney Gateway project, the Warringah Freeway upgrade, continuing the More Trains, More Services program and ongoing construction of the Sydney Metro City, Southwest and Sydney Metro West.

Health

NSW Health has received A$30.2 billion to help ensure world-class health services. More than A$3 billion will be invested this year to build and re-develop hospitals and health facilities. This is in addition to recurrent funding, which exceeds A$27 billion. 

A record A$10.9 billion will be invested in mental health services over the next four years, including A$2.6 billion in 2021-22. Focus areas include A$109.5 million over four years to develop 25 ‘Safeguards’ child and adolescent mental health response teams and A$36.4 million over four years for 57 mental health response and recovery specialists across regional and rural NSW to provide support in times of disaster or crisis and during the recovery phase.

Other highlights include A$1.1 billion to continue the State’s response to COVID-19, A$159.3 million to fund services in newly constructed hospitals scheduled to open in 2021-22, more than A$214.3 million to boost NSW Ambulance services and A$82.8 million over four years to continue strengthening specialist palliative and end-of-life care.

Rebates, concessions and cost of living relief

More than A$6 billion in new and existing rebates, concessions and cost of living measures are available to households to reduce everyday living costs and encourage involvement in activities to support development and participation.

Highlights include A$333.2 million for energy rebates and emergency vouchers to help reduce energy bills and provide the community with more affordable energy, A$246.3 million to extend the Regional Seniors Travel Card for an additional two years and A$150.0 million to deliver the Start Strong Free Preschool program for school year 2022.

A cost of living program and campaign funded at A$14.2 million will aim to raise public awareness of NSW Government support available to individuals and families. The Treasurer’s financial literacy program will also encourage children to develop positive money habits and increase their financial literacy.

Regional New South Wales

More than A$2.8 billion will go to the Department of Regional NSW to help regional communities continue to recover and grow.

Snowy Hydro Legacy Fund priorities will receive A$878 million, including A$48 million for an expanded Farms of the Future program A$50 million for the mobile coverage project as part of the regional digital connectivity program, and A$462 million for the special activation precinct and regional job precinct programs to create jobs and build an investment roadmap across the state.

The Stronger Country Communities Fund round four will roll out a total of A$100 million for new projects across all 93 regional local government areas (LGAs). Round eight of the Resources for Regions program will allocate A$75 million across 24 eligible LGAs for projects that support mining communities.

The A$30 million Regional Tourism Activation Fund is designed to deliver high-impact tourism and events infrastructure to boost local economies. The A$20 million Regional Events Acceleration Fund will aim to attract major events and visitor dollars to regional towns.

Digital infrastructure and services

Significant investments will boost the State’s position as a leader in the provision of digital services and technologies. The Digital Restart Fund will rise to A$2.1 billion, including an extra A$500 million over three years to fund three significant new investments in the areas of single-digital patient records, an e-construction initiative to develop digital platforms for certification registries, and cyber security projects. The Data Analytics Centre, which is critical in informing the State’s response to COVID-19, will also receive A$38.3 million over four years.

Electric vehicles

The NSW Government’s electric vehicle strategy commits A$490 million in 2021 to cut taxes, boost uptake and reduce barriers for electric vehicle (EV) purchases over the next four years. 

Stamp duty will be waived for eligible EVs (battery and hydrogen fuel cell vehicles) priced under A$78,000 purchased from 1 September 2021. Rebates of A$3000 will be offered on private purchases of the first 25,000 eligible EVs under A$68,750 sold in NSW from 1 September 2021. New charging infrastructure will receive A$171 million. A further A$33 million will help transition the NSW Government passenger fleet to EVs where feasible, with the target of a fully electric fleet by 2030. 

The Budget also invests in other energy related productivity measures, such as A$379.6 million in new funding for an electricity infrastructure roadmap, including renewable energy zone network infrastructure across the State. The transition to electrify all NSW buses has also started, with A$10 million earmarked for a strategic business case to transition to zero-emission buses.

Road user charge on zero and low emissions vehicles


As more electric vehicles will result in lower state revenue from fuel excise charges, the NSW Government will introduce a road user charge on zero and low emissions vehicles. This will begin from the earlier of 1 July 2027 or the date battery electric vehicles comprise 30% of new vehicle sales in NSW.

The charge will be levied at 2.5 cents per kilometre and indexed annually at CPI for battery and fuel cell electric vehicles and at 2 cents per kilometre for plug-in hybrids. This is expected to increase revenue by A$1.2 billion over the 10-year period from 2027-28 to 2030-31. The Budget suggests this charge will be applied to electric vehicles as a pilot and may be rolled out to all vehicles, with the possible abolition of fuel excise charges, at that time.

Innovation 

The Budget allocates more than A$426 million to Investment NSW to attract investment, research and development to create the jobs of the future. In addition, A$35 million in funding is provided to support delivery of an entrepreneurship and innovation ecosystems action plan. A further A$10 million is earmarked for Tech Central, including deep-tech innovation infrastructure and talent development to address an emerging skills gap in the tech sector. 

Small business

The NSW Small Business Commission will receive A$13 million to provide additional mediation staff to support the low-cost resolution of retail and commercial tenancy and business-to-business disputes, additional customer service positions, enhanced advocacy, surveying and stakeholder engagement activities as well as continuation of the tender skills support program in partnership with TAFE NSW.

A new small-business shorter payment terms policy will be introduced from 1 July this year. This will mean that large businesses that contract to supply goods or services valued at or above A$7.5 million to NSW Government agencies will be required to pay their small business subcontractors within 20 business days.

A refreshed small and medium enterprise and regional procurement policy will increase opportunities for SMEs and regional businesses to supply goods and services.

The Business Concierge service will receive A$20.0 million in 2021-22 to provide small business operators with personalised support through Service NSW. The Business Connect program will also continue, with A$9.8 million in 2021-22 to enable small businesses across the state to access targeted business advice and skills training.

Payroll tax cuts will be continued. The rate was cut from 5.45% to 4.85% for two years in the 2020-21 Budget and there was a permanent increase in the payroll tax threshold to A$1.2 million.

The A$1500 fees and charges rebate scheme will also continue. The scheme is available to small businesses with a total wages bill below the 2020-21 A$1.2 million payroll tax threshold from 1 April 2021 until 30 June 2022, for eligible fees and charges due and paid from 1 March 2021. 

Infrastructure contributions reform

The Budget announced the most significant reforms to the infrastructure contributions system in three decades, with plans to unlock up to A$12 billion in productivity benefits through changes to how public facilities and services are funded through the planning system. The NSW Government will publish its blueprint to implement the recommendations and how it will be delivered in the next 18 months.

Our Budget infographic highlights the major announcements.

NSW Budget 2021-22 Overview Infographic

Infographic of NSW State Budget 2021-22 (Click to open in a new window)

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Related reading

2021-22 NSW Budget Papers

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