NSW Treasurer Dominic Perrottet set to deliver budget during coronavirus full of proven measures and plenty of gambles
Dominic Perrottet’s legacy as Treasurer may well be that he handed down the biggest deficit New South Wales ever experienced.
While he’s well aware the figures in tomorrow’s Budget could easily become a trivia question used in years to come, the Treasurer is hopeful history may be kinder to him.
“Success is going to be not measured on the day,” Perrottet said at a mental health budget announcement yesterday.
“Success is going to be in five, 10 years’ time where people look back and see where the New South Wales economy has come from.”
Before the coronavirus pandemic, Treasury forecast average surpluses of $1.9 billion over four years and net debt was tipped to be $12.9 billion by June 2020 — the lowest of all states.
But tomorrow the deficit will be in the tens of billions and the Treasurer has fast become an advocate of borrowing.
“There’s never been a better time to borrow,” Perrottet said.
“We’re borrowing around 1 per cent. That is an incredibly low rate and we’re going to take that opportunity.”
While he is remaining tight-lipped until tomorrow on just what the state’s net debt position will be, this is a dramatic shift in approach from Perrottet.
For him, borrowing is seen as the only way to create jobs and stimulate the economy when faced with a drastic decline in revenue from the GST, stamp duty and payroll tax.
Last year the state’s unemployment was at 4.4 per cent. It’s currently at 7.2 per cent and tipped to increase further.
In an attempt to replace the hundreds of thousands of jobs lost, the Government is determined to deliver almost all of its infrastructure pipeline.
It’ll fast track some and it’s added small to medium size projects.
So, while there’s been a change in tack when it comes to debt, the Treasurer remains reliant on his past strategy to build the state out of this economic crisis.
Perrottet has also flagged further privatisation of state-owned assets and he is again using the public sector to save money by imposing a cap on wage increases.
In the end it’ll be a budget of tried and tested measures as well as one full of gambles which the Treasurer can only hope will pay off over time.