Missed opportunities

Affordable housing. Again, there is nothing substantial in the budget that is materially going to change housing costs. A major chunk ($1.5 billion) of the government’s $2.8 billion housing package goes towards its new shared equity scheme and stamp duty reform – both of which will impact a relatively small number of people. There is very little that will move the dial on the supply of new homes nor add social and affordable dwellings.

Tax reform. After expectations stamp duty reform was dead in the water, Treasurer Kean used his pre-budget media campaign to say it was back on the agenda. Today he confirmed first home buyers would be able to choose between upfront stamp duty and an annual land tax for property purchases of up to $1.5 million. This is a welcome first step towards axing this outdated and regressive tax, but we urge the NSW Government to push ahead with removing it altogether.

The position of the NSW Government is that this can only happen if Federal Government provides funding to cushion the revenue hit from receiving less stamp duty in the transition. We do not accept this premise, the ACT found a way to undertake stamp duty reform without federal support – but we agree it would be easier/faster if the federal government helped.

Cost of living. While the Treasurer says this budget is all about reform, the budget papers make it pretty clear re-election is the more dominant theme. As part of that, more than $7.2 billion has been committed over the next financial year towards “boosting family budgets,” including a new toll refund package (saving drivers up to $750 a year), and a new $150 Back to School voucher.

The problem of paying too much in tolls is a symptom – of a fragmented approach to road pricing, and more deeply, of a planning system that has locked so many households into car dependency, forcing them to spend a lot of money each month on driving everywhere they need to go.

Disaster preparedness. A horrendous few years of natural disasters have not catalysed investment in climate risk reduction. While the budget notes severe storms and floods were “not enough to derail the strength of the broader economic recovery underway in NSW,” ratings agency Moody’s acknowledged a moderately negative exposure to environmental risks arising from climate-change related natural disasters and the carbon transition. 

This budget has appropriately allocated billions of dollars in emergency services and flood relief. But while there is serious money ($1.4 billion) for cleanup and temporary housing, there is no funding allocated for recovery across the Northern Rivers. We do need to wait for the findings of the 2022 Flood Inquiry, but this budget presented an opportunity for government to make a clear statement that it will support flood-affected communities, and follow that support through for communities returning to flood-affected areas, or relocating to areas with lower flood risk, lower insurance premiums, and the confidence to invest without the fear of being flooded out again.

This budget was an opportunity for this government to show it had begun to learn the lessons of Lismore, and started to strategically plan for future climate risk. Yet only $10 million has been assigned statewide each year to adapt to these emerging climate risks. Lismore experienced a flood two metres above its historical maximum, which was devastating and should be a game changer for how we think about and plan for climate risk – especially in Greater Sydney, which has the most number of uninsurable addresses in the country.

Infrastructure. We think it’s clear the single biggest accomplishment of this government over the past decade has been the infrastructure boom – especially Sydney Metro. Creating a fast, frequent, grade separated way to move across Sydney is changing the geography of the city. It is also providing an armature to organise growth in the coming decades.

Metro becomes increasingly valuable as new lines are added because of the network effect: each line and each station adds value to all the others. As it becomes more of a grid of interconnecting lines, like you see in London or Paris or Tokyo, it becomes more and more useful.

We have been growing increasingly concerned that the government is losing its will to keep going. This is partly because the costs are escalating, as the construction industry reaches capacity across Australia. 

It makes all the sense in the world to stretch out the delivery pipeline over a longer period of time, given the capacity constraints in the industry, and government has indeed decided to do that.

But what we want to see is progress on the planning, design and corridor preservation for the next set of projects. Sydney Metro as currently committed is a partial system that will not do what Sydney needs.  

We applaud moves in this budget to potentially expand the Western Sydney Airport to Glenfield but would like to see far more ambition around expansions of the network, particularly in western and south western Sydney.