The NSW budget is back in the black, with state treasurer Andrew Constance revealing a $3.1 billion turnaround to create a $1.2 billion surplus.
The figures emerged in the 2013-14 Total State Sector Accounts and are largely due to stronger-than-predicted stamp duty revenues off the back of strong growth in residential and commercial property, plus an unexpected additional $1.2 billion in Commonwealth grants.
The net operating balance of the total state sector was a surplus of $2.8 billion. General government sector revenues grew by 9.8% in the year and expenses grew by 4.6% from 2012-13.
Net debt was $6.9 billion at 30 June 2014 – an improvement of $5 billion over the previous year, predominantly due to increased cash from business asset sales, lease transactions and the better than expected operating surplus.
Net financial liabilities of the total state sector were $117.6 billion at 30 June 2014, an increase of $2.6 billion over the previous year, largely due to lower net debt offset by increased superannuation liabilities as a result of a discount rate of 3.57% on 30 June 2014, compared to the Budget forecast of 3.8%. As a result, General Government Sector expenses increased by $1.9 billion and superannuation liabilities increased by $6.6 billion. Prior years have also been restated to reflect this change.
Asset sales also played a part in firming up the bottom line with the privatisation of electricity generation and the lease of ports delivering a net gain of $600 million and additional cash of $2.9 billion, including stamp duty.
The Commonwealth also lent a hand by bringing forward grants into 2013-14 for two major road projects WestConnex ($500 million) and the Pacific Highway ($738 million).
Capital expenditure of the total state sector for 2013-14 was $13.9 billion. Net worth of the total state sector increased by $7.9 billion (4.9%) to $167.8 billion and was largely due to increases in the value of financial and non-financial assets, offset by the increased superannuation liability.
The Treasurer said the NSW Budget was now in “a powerful position” with net debt down, expenses under control and our triple-A credit rating recently upgraded to a stable outlook.
“As the CommSec report on the State of the States released earlier this month confirmed, we are once again the economic powerhouse of the nation,” Constance said.
The timing is perfect for the government with an election due in March next year.
The Total State Sector Accounts are here.
The NSW Half-Yearly Review will be released in December.