NSW Treasurer warns of a tough budget due to $11.9b GST hole

ABC NEWS (Australia)

The state treasurer says the budget is facing a shock that'll be even worse than the Covid-19 pandemic. Daniel Mookhey is forecasting a revenue shortfall of nearly $12 billion dollars as a result of the latest GST carve-up, and he says it's almost certain the state will lose its prized triple a credit rating.

Transcript

00:00 In March, the government was floating the idea of building a big new roof at Homebush,

00:06 after Taylor Swift risked being washed out.

00:09 Now the Treasurer says the state can't afford any such extravagance, as he prepares for

00:14 the government's difficult second budget.

00:16 "As I think of it, our highly anticipated next album."

00:20 But voters may not like what they're about to hear.

00:24 Treasury's done the sums on the latest GST carve-up.

00:27 New South Wales is facing an $11.9 billion shortfall over four years.

00:32 With that money, the state could have hired 19,000 teachers or 16,000 police officers

00:37 over the same period.

00:39 The Commission's decision will see New South Wales lose more revenue than we did during

00:45 COVID-19.

00:46 "It's not unusual for a state or a territory at different times in the history of the Commonwealth

00:52 Grants Commission to have a different view about the allocation."

00:56 The funding shortfall will almost certainly mean the state loses its remaining AAA credit

01:01 ratings, potentially pushing up the cost of government borrowing.

01:04 "Another notch downgrade for New South Wales could be worth something like $100 million

01:08 per year for the state's interest bill."

01:11 "I just make the point that Queensland has a lower credit rating than New South Wales

01:17 and they are borrowing cheaper than we are."

01:19 All these warnings are designed to soften voters up for what could be a tough budget.

01:24 Only where the cuts will come from remains a mystery.

01:27 The opposition is accusing the government of using the GST shortfall to try to disguise

01:32 its own economic missteps.

01:34 "Stop playing the blame game and accept responsibility for the budget in New South Wales and the

01:40 way it operates."

01:41 We'll have to wait nearly two months for the detail.

01:44 The budget will be handed down in mid-June.

01:46 [BLANK_AUDIO]

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