Increased Costs from Natural Disasters
The 2025–26 Budget acknowledges the growing financial burden of natural disasters, which are becoming more frequent and severe across New South Wales. Fiscal pressures for the State include:
- expenditure on natural disasters has increased more than 1,000 per cent in the six years since the 2019-20 bushfires compared to the six years prior
- uncertainty over the timing of Australian Government contributions
- disaster expenses have worsened the budget result by $920.9 million in 2024-25 and $980.9 million in 2025-26.
Ongoing investment in sustainable infrastructure
An $118.3 billion infrastructure package was announced in the Budget through to 2028-29, supporting the State’s essential infrastructure, with investment prioritised in schools, hospitals, housing and critical services like water and energy. Sustainable finance considerations were central to this infrastructure package: to help NSW grow and thrive, to tackle significant issues, and to support the transition to net zero.
Budget highlights include:
- $55.6 billion for key transport projects to support growing communities, including Sydney Metro West, Western Sydney Harbour Tunnel Upgrade, Sydney Metro-Western Sydney Airport, Zero Emission Buses Program
- $12.4 billion of capital investment to build and upgrade health infrastructure, $3.3 billion of which in 2025-26.
- $9.0 billion for education and skills infrastructure, supporting the construction of new schools, particularly in regional areas.
- $5.1 billion capital expenditure for new social housing, which will fund the land purchase and construction of an estimated 8,400 new social homes
- $472.9 million for long lasting biodiversity protections and environmental management.
You can also read the Government’s full infrastructure investment statement on the Budget website.
Sustainability Bonds
Established in 2018, the NSW Sustainability Bond Programme (SBP) provides investors with the opportunity to be part of a more sustainable future by helping to finance or refinance government projects that support positive and transparent social and environmental outcomes for the community. It also supports Australia’s ongoing commitment to meeting the United Nations Sustainable Development Goals.
Under the SBP, the NSW Government can issue green, social, and sustainability (GSS) bonds. Unlike the NSW Government’s regular bonds, which finance government's general-purpose expenditure, the GSS bond proceeds are allocated to eligible projects, and the performance of those projects is reported on annually to investors.
NSW remains a key issuer of GSS bonds in Australia, with $12.1 billion in GSS bonds on issue in face-value terms as of 28 August 2025.
Learn more about how NSW Government applies environmental, social and governance considerations to its financial activities.