The NSW government has slashed more than $3 billion from its planned spending for the next four years, as today's mini-budget confirms the state will record a deficit of $917 million this financial year.
Treasurer Eric Roozendaal has handed down the mini-budget, insisting the state can withstand a dip into the red for one year, which he said had been caused by a slowing property market and a fall in GST revenue.
He said NSW was forecast to return to the black the following year with a surplus of $138 million, that is expected to grow to $573 million in 2010-11 and reaching $900 million in 2011-12.
The mini-budget process has seen the state razor gang make $3.3 billion worth of savings over the next four years, while it will rake in $3.6 billion in revenues.
The ambitious four year capital works program outlined in this year's budget has been re-prioritised but the outlay remains largely unchanged, with $56.8 billion worth of infrastructure projects to be built.
That is down $890 million from what was announced in the budget in June. "NSW will maintain the biggest public infrastructure investment program in Australia - and we are able to do so because the government has tightened its belt," Mr Roozendaal said.
The mini-budget will also bring an end to the 10-year long electricity debate, with the three electricity retailers to be sold off, along with the sale of development sites for power generators and the transfer of electricity trading functions to the private sector.
Mr Roozendaal said the government is also considering the possible sale or lease of other assets including NSW Lotteries, its waste services, the Pillar Superannuation Administration Corporation, and the Roads and Traffic Authority's (RTA) personalised number plate business.
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. States 'dreaming' over extra funding Prime Minister Kevin Rudd says he will not bow to pressure from states to provide billions of dollars in extra funding.
Budget worse than expected - Rees NEW South Wales Premier Nathan Rees says the economic outlook for the state is more bleak than he expected, and difficult decisions will have to be made.