Statement from NSW Minerals Council CEO Stephen Galilee
The NSW Treasurer should be commended for delivering a State Budget that limits expense growth, reduces state debt, and aims to return NSW to modest surplus in the years ahead, particularly in an election year.
However, today’s Budget papers also include a stark reality check on the cost of the federal Labor Government’s economic mismanagement on inflation and interest rates, and their proposed changes to capital gains taxes and negative gearing.
According to the Budget, NSW is now set to lose at least $8.4 billion in foregone property-related taxation revenues over the next four years due to the negative impact on housing prices and transaction volumes. This is a significant revenue downturn, adding to the ongoing budgetary cost of Canberra’s unfair limited allocation of federal GST revenues to NSW.
Meanwhile, mining-related NSW revenue forecasts have been revised upwards, with mining royalties now expected to deliver around $12.9 billion for NSW taxpayers over the next four years – an increase of $180m since the NSW half-yearly budget review.
Mining royalties are now forecast to deliver $3.432 billion to the NSW Budget in 2026-27 alone, which would make mining the fourth highest single source of NSW Government revenue after Commonwealth GST payments, property-related stamp duties, and state land taxes.
This is a critical revenue source for NSW. For example, according to NSW Budget Paper No.03, these mining royalties are now expected to be enough to completely fund either of the following:
- The $11.9 billion allocated in today’s NSW Budget for health infrastructure over the next four years to deliver 32 new and upgraded hospitals including at Bankstown, Royal Prince Alfred, Nepean, Liverpool and John Hunter Hospitals and health precincts, with $3 billion in total for regional health infrastructure upgrades
- The $11.3 billion allocated in today’s NSW Budget for education and skills infrastructure over the next four years , including $9.2 billion to support the delivery of more than 260 new and upgraded schools with $2.3 billion allocated to schools in regional NSW
- The $12.9 billion allocated in today’s Budget towards the Sydney Metro West project
According to the Budget papers, the economy is set to slow in the years ahead. The NSW Government must therefore take every opportunity to secure the large scale investment needed to generate economic activity and jobs.
Our economy cannot be sustained by short-term construction jobs related to renewable energy projects and data centres. Mining consistently delivers an average of around 10-13 percent of total NSW capital investment each year, and this must continue. Nine new mines are currently proposed for NSW, along with extensions for another eighteen others. If approved, these projects would inject around $9.7 billion of new private sector investment into the NSW economy, mostly in the regions, protect 8,000 current jobs, and generate 6,500 new jobs.
Today’s budget outlines the economic challenge ahead, and with thousands of mining jobs and billions in potential investment in the balance, the NSW Government should urgently direct the new Infrastructure Delivery Authority to prioritise attracting more mining investment. With an election approaching, tens of thousands of mining workers and their families in communities across NSW will be watching closely.