Hello, and welcome to The Sydney Morning Herald’s live coverage of the 2025-26 NSW budget.I’m Penry Buckley and I’ll be with you all day as NSW Treasurer Daniel Mookhey prepares to hand down his third state budget at 12pm.NSW Treasurer Daniel Mookhey in his office at the Parliament of NSW ahead of the 2025 state budget.Credit: Dominic LorrimerDon’t know your revenue from your expenditure? Unfazed by the federal budget? Here’s why you should get excited about the state offering.For a start, NSW has the biggest economy of any state in Australia, significantly larger than the ACT or Queensland, which also have their budget days this week. If it were its own country, NSW would be one of the 40 largest economies worldwide, so how the $120 billion annual budget is spent is of some consequence.It also contains key promises that directly impact lives in NSW, across the portfolios of housing, health and education. We’ve already had some sense of what’s in store, but stay with us as we reveal the full breakdown.Latest postsLatest postsNSW Treasurer Daniel Mookhey has said the next decade will be defined by a shift from mega-projects such as metros and motorways to replacing ageing water and power assets – the “pipes and poles” – to support much-needed housing.NSW Treasurer Daniel Mookhey has spotlighted the housing crisis and the “need to build, build, build”.Credit: Sam Mooy“The rule of thumb, that I say internally, is that in general, if it was something that [former Labor premier] Neville Wran built in the late ’70s and early ’80s, in the next 10 years, we’re going to look how we replace it and renew because these are assets now that are quite old,” Mookhey told our state political editor Alexandra Smith.You can read her full pre-budget interview with the NSW treasurer here.As with the federal budget, the ultimate kudos for any sitting government is to deliver a surplus, although NSW hasn’t had one since the Berejiklian government’s 2018-19 budget. This year will likely be no different, not helped by the government’s failure to push through controversial workers’ compensation reforms.Mookhey delivered a $9.7 billion deficit in his first budget. His hopes of a slim surplus last year were thwarted by the GST carve-up in which NSW received $1.9 billion less, and an unfortunate accounting error that resulted in Sydney Metro property sales being counted twice, a miscalculation of $1 billion.Originally forecast at $3.6 billion, a cost blow-out of $1.4 billion brought the total deficit from last year to just under $5 billion, according to the government’s mid-year review.However, the state economy is showing signs of improvement – this morning the Herald reported this year’s budget will deliver a gross debt improvement of $9.4 billion on the former Coalition government’s 2023 projections, reducing interest payments by $400 million by June 2026.Mookhey has also told the Financial Review he expects a small cash surplus this year, meaning daily spending is no longer creating debt, but capital expenditure may still result in an overall deficit, predicted in December to be about $2.2 billion.
The Minns government’s third budget is likely to follow the fiscal restraint of the first two. That’s not least because the government failed to push through its controversial workers’ compensation reforms this month, which Mookhey has claimed would save billions of dollars.As our state political editor, Alexandra Smith, reported this morning, there’s also a heavy burden from relief payments, which have been hit by a 10-fold increase from worsening natural disasters since the Black Summer bushfires.Credit: Aresna VillanuevaEssential services and housing will be front and centre this year. At his budget preview speech last month, the treasurer spoke of the “need to build, build, build”. The government has already released one of this budget’s flagship housing policies, to indefinitely extend a 50 per cent tax break for eligible build-to-rent developments.There’s also a record $9 billion investment in school infrastructure over four years, $492 million for a state-of-the-art pathology service in western Sydney, and $452 million to increase bus services, including 50 new “bendy” buses.You can read the rest of the promises the government has already made public over the past few weeks in this handy list here.
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Think of the budget lockup as a bit like a lock-in at the pub, or an invite-only private concert (but potentially less fun).Our reporters, editors and photographer walked into the government’s Martin Place offices at just after 7am today, handed over their phones and set their laptops to flight mode.From left to right: Parramatta bureau chief Anthony Segaert, Sydney editor Megan Gorrey, state political editor Alexandra Smith, economics writer Millie Muroi and health editor Kate Aubusson.Credit: Michael HowardAfter check-in closed, they received a bevy of papers, statements and glossy ministerial releases to pore over. The star of the day, NSW Treasurer Daniel Mookhey, will make several appearances throughout the morning to talk through this year’s offering.The lockup is a uniquely Australian tradition. State and federal governments use them to give journalists advance access to papers, but without allowing them to seek meaningful reaction from experts and the public before the budget is laid out in full in parliament.Rest assured, the Herald team is expertly interrogating announcements across the government’s portfolios, including, for the first time, a special focus on the policies that affect western Sydney.We will soon bring you everything you need to know, beyond the puff and spin, when they can resume contact with the outside world at noon.Hello, and welcome to The Sydney Morning Herald’s live coverage of the 2025-26 NSW budget.I’m Penry Buckley and I’ll be with you all day as NSW Treasurer Daniel Mookhey prepares to hand down his third state budget at 12pm.NSW Treasurer Daniel Mookhey in his office at the Parliament of NSW ahead of the 2025 state budget.Credit: Dominic LorrimerDon’t know your revenue from your expenditure? Unfazed by the federal budget? Here’s why you should get excited about the state offering.For a start, NSW has the biggest economy of any state in Australia, significantly larger than the ACT or Queensland, which also have their budget days this week. If it were its own country, NSW would be one of the 40 largest economies worldwide, so how the $120 billion annual budget is spent is of some consequence.It also contains key promises that directly impact lives in NSW, across the portfolios of housing, health and education. We’ve already had some sense of what’s in store, but stay with us as we reveal the full breakdown.