Driving economic growth to secure our future

A responsible pathway to surplus

Having inherited a $15.3 billion budget deficit, the largest ever passed from one government to another, the 2025-26 Budget outlines a responsible path back to a moderate surplus.

The budget turnaround is supported by a $9.4 billion reduction in the debt projected prior to the last election under the former Government.

The NSW Government will save more than $400.0 million in interest payments every year, allowing us to make record investments in essential services while presenting a sustainable pathway to surplus.

The 2025-26 Budget also lays the foundation for our future economic growth with measures that facilitate rapid investment, create jobs, and accelerate the delivery of new homes.

Following a global pandemic, bushfires, floods, high inflation and interest rates, families and businesses in New South Wales are under pressure.

We are now seeing the first signs that the NSW Government’s fiscal consolidation strategy has avoided additional pressure on inflation without restricting wage growth or increasing joblessness. Inflation declined to 2.3 per cent in the March quarter of 2025.

Budget result

Investing in economic growth

Having made progress to address inflation and fiscal repair, New South Wales enters a new economic challenge. Now is the time to secure New South Wales’ future economic growth.

The 2025-26 Budget lays the foundation for our economic success with:

• a new Investment Delivery Authority to fast-track non-residential investments over $1.0 billion, to bring forward up to $50.0 billion of investment per year into the state
• the world-leading Pre-Sale Finance Guarantee to allow thousands of housing projects that have planning approval to secure finance earlier and begin construction
• $586.2 million to grow the creative economy and attract visitors, tourism and trade through the revival of Sydney as a vibrant world-class city
• accelerating the training of 4,800 new construction trades workers alongside the growing care economy as part of a $1.2 billion funding injection into TAFE training.

General government expenses

Expenses growth is projected to be contained at an average rate of 2.4 per cent per year over the next four years, well below the 6.2 per cent average per year under the former Government in the four years to 2019-20.

Gross debt

Rebuilding essential services

The NSW Government’s commitment to responsible budget management has allowed for the next step towards rebuilding our essential services after 12 years of neglect. Major investments in child protection, TAFE, education and healthcare headline the 2025-26 Budget.

Gross debt is down $9.4 billion from the projection in the Pre-Election Budget Update. This has been achieved while investing in an essential infrastructure program that exceeds $30.8 billion in 2025-26.

Lower debt allows for more than $400.0 million per year in avoided interest expenses to be redirected towards essential services. This has allowed for investments including:

• $1.2 billion for child protection reforms, including a 20 per cent increase to the foster care allowance, more and better paid caseworkers, and new safe housing for children in care
• $5.6 billion additional investment in public schools over the next 10 years, on top of $4.8 billion from the Australian Government
• $12.4 billion investment in health infrastructure, including new and upgraded hospitals at Bankstown, Rouse Hill, Westmead and Wollongong.