NSW budget 2025 LIVE updates: Treasurer Daniel Mookhey set to hand down third state budget

Sydney Morning Herald

24-06-2025

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Welcome to our rolling NSW budget coverage
Penry Buckley
Hello, and welcome to The Sydney Morning Herald 's live coverage of the 2025-26 NSW budget.
I'm Penry Buckley and I'll be with you all day as NSW Treasurer Daniel Mookhey prepares to hand down his third state budget at 12pm.
Don't know your revenue from your expenditure? Unfazed by the federal budget? Here's why you should get excited about the state offering.
For a start, NSW has the biggest economy of any state in Australia, significantly larger than the ACT or Queensland, which also have their budget days this week. If it were its own country, NSW would be one of the 40 largest economies worldwide, so how the $120 billion annual budget is spent is of some consequence.
It also contains key promises that directly impact lives in NSW, across the portfolios of housing, health and education. We've already had some sense of what's in store, but stay with us as we reveal the full breakdown.
10.55am
Will this year's budget deliver a surplus?
By Penry Buckley
As with the federal budget, the ultimate kudos for any sitting government is to deliver a surplus, although NSW hasn't had one since the Berejiklian government's 2018-19 budget. This year will likely be no different, not helped by the government's failure to push through controversial workers' compensation reforms.
Mookhey delivered a $9.7 billion deficit in his first budget. His hopes of a slim surplus last year were thwarted by the GST carve-up in which NSW received $1.9 billion less, and an unfortunate accounting error that resulted in Sydney Metro property sales being counted twice, a miscalculation of $1 billion.
Originally forecast at $3.6 billion, a cost blow-out of $1.4 billion brought the total deficit from last year to just under $5 billion, according to the government's mid-year review.
However, the state economy is showing signs of improvement – this morning the Herald reported this year's budget will deliver a gross debt improvement of $9.4 billion on the former Coalition government's 2023 projections, reducing interest payments by $400 million by June 2026.
Mookhey has also told the Financial Review he expects a small cash surplus this year, meaning daily spending is no longer creating debt, but capital expenditure may still result in an overall deficit, predicted in December to be about $2.2 billion.
10.45am
What we know about the budget so far
By Penry Buckley
The Minns government's third budget is likely to follow the fiscal restraint of the first two. That's not least because the government failed to push through its controversial workers' compensation reforms this month, which Mookhey has claimed would save billions of dollars.
As our state political editor, Alexandra Smith, reported this morning, there's also a heavy burden from relief payments, which have been hit by a 10-fold increase from worsening natural disasters since the Black Summer bushfires.
Essential services and housing will be front and centre this year. At his budget preview speech last month, the treasurer spoke of the 'need to build, build, build'. The government has already released one of this budget's flagship housing policies, to indefinitely extend a 50 per cent tax break for eligible build-to-rent developments.
There's also a record $9 billion investment in school infrastructure over four years, $492 million for a state-of-the-art pathology service in western Sydney, and $452 million to increase bus services, including 50 new 'bendy' buses.
You can read the rest of the promises the government has already made public over the past few weeks in this handy list here.