Mr Speaker/President -
This Budget, the first of the Carr Labor Government, is designed to set things right, right from the start.
For too long, New South Wales has mortgaged its future, mortgaged the future of our kids and theirs.
This is the Budget that begins to pay our way.
This is a Labor Budget, a Budget that delivers on Labor’s priorities in health, education, community services and safety.
For too long we have put up with long hospital waiting lists, an understaffed police service, inadequate child protection and lack of accommodation for the disabled.
This Budget delivers major improvements in hospitals, schools, police and crime prevention and community services.
For too long, New South Wales has done too little to protect the quality of our environment.
This is the Budget that begins the repair of our forests, our rivers, and our land.
For too long, too many taxpayers’ dollars have simply been wasted.
This is the Budget that begins to cut the waste, a Budget that focuses on fundamentals, and begins to give taxpayers much better value for their money.
This is because we’re determined to set things right from the start.
In their first budgets, Nick Greiner, Jeff Kennett and Dean Brown all cut basic government services.
They said times were tough and they took the easy way out.
Theirs were Liberal budgets, with Liberal priorities.
This is every inch a Labor Budget, a Budget that delivers social reform - the very purpose of Labor’s existence.
Above all else, our commitment is to the future, to ensure that New South Wales has the competitive edge to attract the investment and business we need to provide jobs, and improve the standard of living and quality of life of this generation and the next.
Key features for the coming year include:
The financial strategy of this Budget positions New South Wales for the long term.
In keeping with our commitment prior to our election to office, this Budget starts the process of gradually but steadfastly paying off the State’s $17 billion Budget Sector net debt.
The General Government Debt Elimination Bill, which I tabled in June, is cognate to the appropriation bills introduced by the Premier.
It is pathfinding legislation that provides a comprehensive fiscal framework for the State.
It has four key elements:
It will introduce standards of honesty and accountability into the Budget process that are unparalleled in any Australian jurisdiction.
The centrepiece of the legislation, however, is its commitment to completely eliminate general government net debt by the year 2020.
To this end I set out in the June Financial Statement fiscal targets for the next three years, building to a sustainable Budget surplus by 1997-98.
This Budget delivers on these targets.
Our aim is to pay off the $17 billion debt in the same common sense way that a family pays off its mortgage.
We should always keep in mind that the next generation will be seeking jobs in a fiercely competitive world economy.
We have an obligation to ensure that they are not lumbered with our debts.
A debt-free general government sector will be one of the legacies we leave them.
Currently, $1.6 billion of budget payments are consumed by debt servicing costs, simply paying the interest.
That’s nearly one in every ten dollars of current outlays, or the equivalent of half of what we spend to run our school system.
The Budget is also vulnerable to the impact of the economic and property cycle.
In the last major recession, the previous Liberal-National Party Government only just stayed solvent, by increasing taxes by broadly $1 billion per annum.
It is vital that we are in a position to absorb the impact of future economic and property cycles without resorting to tax hikes or slashing core services.
Debt reduction puts us in that position.
The 1995-96 Budget is framed within the context of four years of economic recovery and growth, with continuing growth projected into 1995-96.
National economic growth is projected to slow from 4½ percent real growth in 1994-95 to about 3¼ percent in 1995-96.
New South Wales growth is projected to be modestly higher at 3¾ percent largely because of the recent easing of the drought.
We expect a mild slowdown in 1996-97 due to slower world demand and a pause in business investment, before returning to a higher, long-term trend growth rate in 1997-98.
The CPI is projected to increase to 4.3 percent in 1995-96 and then gradually decline.
Employment should continue to grow at a relatively strong rate, in the order of 3 percent.
Over the course of this Parliament, it is projected that New South Wales will gain an additional 260,000 jobs.
On an unchanged policy basis, the starting point for the preparation of the 1995-96 Budget was a deficit of broadly $400 million.
In addition, commitments of the previous Government, totalling $54 million in 1995-96 and rising to $80 million per annum had not been included in the forward estimates.
These additional commitments did not include a range of other unfunded decisions of the previous Government, such as:
In addition, the Government will this year be hit for up to $55 million for costs associated with the sale of the State Bank, an amount which was also not provided for in the forward estimates.
The Government’s own commitments totalled broadly $300 million per annum.
In summary, the starting point was a completely unsustainable deficit both for this year and future years.
Attacking that deficit, and fulfilling our commitments has been a massive task. I believe we have succeeded.
Subject to the economic and revenue forecasts and the full realisation of our savings strategies, the measures needed to reach our fiscal targets, not just for this year but also for 1996-97 and 1997-98, are already built into this Budget.
This year’s underlying Budget result is a deficit of $238 million with a projected small surplus next year and a projected surplus of $268 million in 1997-98.
The projected result for 1997-98 exceeds our targets and may therefore provide some leeway in future years.
These results, I must emphasise are underlying. In other words, they are the real results we must focus on in determining whether we are paying our way.
The actual bottom line results are much better with large surpluses for both this year and next.
However, they include substantial non-recurring items, principally the commercial equity restructuring of business enterprises.
The Budget proceeds from these once-off items will not be squandered on annual consumption expenditure, but will be used to significantly reduce general government debt.
For further information about the New South Wales Budget Papers, contact the New South Wales Treasury, Governor Macquarie Tower, 1 Farrer Place, Sydney 2000 or email to firstname.lastname@example.org, NSW Treasury.