Revenue is projected to grow by 4.0 per cent a year on average to 2060-61. This is slower than projected growth in government spending of 4.5 per cent. Slower growth in state based revenues is being driven by a range of factors, such as the ageing of the population and the declining global demand for coal. As state revenue growth slows, we will become more reliant on Commonwealth funding sources to meet the services and infrastructure needs of the population.
GST revenues are expected to grow more slowly as consumption that is subject to GST declines and as changes to GST distribution see New South Wales worse off in the long-run. As GST growth slows, an increasing share of revenues from the Commonwealth will be tied to specific purposes, reducing New South Wales’ autonomy to respond to the needs of citizens.