Thursday, 30 October 2008

NSW slumps even further into red

The state's financial woes have deepened as the global financial crisis hits the property and financial markets. NSW went into the red by $493 million last month alone.

This has dragged NSW to a $656 million cumulative deficit for the September quarter, the first quarter of the financial year.

It prompted NSW Treasurer Eric Roozendaal to warn in Parliament today that tough decisions would be made in the November 11 mini-budget.

Last week, the Rees Government disclosed that the surplus for the financial year to June was only $73 million, well short of the $700 million surplus flagged midyear.

With the slump in taxation revenues, this has made it all but impossible that the $268 million surplus forecast for this financial year, ending June 2009, would be achieved.

The mini-budget is aimed at slashing spending in light of the slump in tax revenues.

The NSW Government is also anxious to maintain the state's triple-A creditworthiness rating from credit agencies such as Moody's and Standard and Poor's.

"The Government must reduce recurrent expenses and reprioritise the forward capital program to address the shortfalls in income that are being experienced," Mr Roozendaal told Parliament.

"This means tough but necessary decisions will be announced in the mini-budget to put NSW on a sustainable footing."

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