Key Things to Know About the NSW Budget

NSW Treasurer Daniel Mookhey revealed the budget deficit has been trimmed down to $3.4 billion.

NSW Treasurer Daniel Mookhey speaks to media during a press conference at Randwick Ambulance Station in Sydney, Australia, on Dec. 13, 2023. AAP Image/Dan Himbrechts

New South Wales (NSW) Treasurer Daniel Mookhey has handed down a no-frills third budget, trading quick fixes for deep reforms as the state chases long-term recovery.

Gone are new cost-of-living sweeteners, with the government doubling down on housing, child protection and infrastructure while leaning on Canberra for short-term relief.

The state’s fiscal position has modestly improved. The deficit has been trimmed to $3.4 billion, down from the forecast $5.7 billion for 2024–25 and significantly below the $15.3 billion deficit inherited in 2021.

Mookhey also confirmed the state has returned to a cash surplus, meaning it is no longer borrowing to fund day-to-day expenses.

Despite the continued deficit, Mookhey maintained confidence in the state’s fiscal trajectory, pointing to a projected return to surplus by 2026–27.

“This is responsible, sustainable budgeting, delivering real investments while building long-term resilience,” he said.

He characterised the Minns government’s approach as “unapologetically pro-growth.”

While the past three years have seen sluggish economic growth, Mookhey pointed to strong employment gains—178,000 more jobs between March 2023 and March 2025—and the creation of over 38,000 new small businesses in the two years to June.

“We are building a better NSW,” Mookhey said. “So I return to the other place [the Legislative Council], proud to commend these bills to your house.”

People cross a road near Pitt Street Mall in Sydney CBD, Australia, on Dec. 24, 2024. Roni Bintang/Getty Images

$1 Billion for Child Protection

A key budget highlight is a record $1.2 billion investment in child protection reform, described by Mookhey as “the biggest investment in child protection in New South Wales history” and “the first major investment in nearly two decades.”

The package includes $143.9 million to boost foster care allowances by 20 percent from Jan. 1.

“For the foster carer of a five-year-old child, that is $3,411.20 extra per year. For the foster carer of a 14-year-old, that is $4,576 more per annum,” Mookhey said.

An additional $797.6 million will be aimed at overhauling the under-resourced out-of-home care (OOHC) system.

More than 2,100 caseworkers will receive $191.5 million in salary increases, and $49.2 million is earmarked to build or upgrade 44 residential homes for high-needs children aged 12 and above.

The Office of the Children’s Guardian will also receive a $10 million funding boost.

An abandoned children’s toy is seen on a path on Dec. 10, 2021. AAP Image/Lukas Coch

4 New Public Schools, Thousands More TAFE Positions

The budget commits $9 billion over four years to education infrastructure, funding four new public schools and 140 new classrooms. Per-student investment will increase to $17,022, up from $14,819 in 2023.

TAFE will receive a record $3.4 billion, including $1.2 billion in new funding to train 23,000 construction workers, upskill 4,800 tradies, expand career fairs in schools, and roll out 3,000 “try-a-trade” opportunities.

To support early education in Indigenous communities, $200.9 million has been allocated to improve Aboriginal enrolment and attendance. An additional $10 million will expand access to early childhood learning and care services.

School students make their way through the Sydney central business district (CBD) in Australia on March 26, 2025. Lisa Maree Williams/Getty Images

Government to Underwrite 5,000 New Apartments

Housing took centre stage, with Mookhey unveiling a “nation-leading market intervention” aimed at accelerating private-sector construction.

A key initiative is a government-backed pre-sale guarantee scheme that will underwrite up to 5,000 new apartments to help developers secure finance—an effort expected to unlock 15,000 new homes over five years.

The Minns government will act as guarantor for up to $1 billion in new housing projects.

“These are the projects that will add more low to medium density housing in neighbourhoods people love to live in—the most challenging projects to deliver under current market conditions,” Mookhey said.

A general view of an apartment development in Sydney, Australia, on March 26, 2025. Lisa Maree Williams/Getty Images

The five-year guarantee applies to developments at least 50 percent approved and valued up to $1 billion, allowing faster project starts.

The scheme is supported by a permanent 50 percent land tax discount for build-to-rent developments.

To streamline planning approvals, the government has committed $83.4 million, including $10.6 million for the new Housing Delivery Authority.

Since launching in January, the authority has facilitated approvals for 53,500 homes.

An additional $145 million will go to Building Commission NSW to enforce construction standards and improve delivery timelines.

Health Sector Receives $12 Billion 

The budget allocates $12.4 billion over four years to health infrastructure, with $3.3 billion committed this year.

This includes $700 million for the new Bankstown Hospital, $492 million for a pathology hub at Westmead, and $210 million—jointly funded with the Commonwealth—for maternity services at Rouse Hill Hospital.

Other health investments include $105.7 million for maternity care and $38.5 million to bolster mental health services across NSW.

Half a Billion More To Public Transport

The budget allocates $522.2 million to improve public transport across the state with a strong focus on Western Sydney.

Of that, $369.9 million will go toward maintaining and expanding bus services—adding new school routes, improving reliability, and better integrating buses with train lines and Sydney’s new metro network.

A further $82.3 million will fund 75 new buses, as part of the government’s effort to rebuild the local bus manufacturing industry, with an emphasis on local production where possible.

Support for Domestic Violence Sufferers

The budget directs $650 million towards the criminal justice system and victim support. This includes $226.8 million for the victims’ support scheme and $272.7 million for domestic, family and sexual violence services.

The Office of the Director of Public Prosecutions will receive $48.3 million, while $12.8 million goes to the Child Sexual Offence Evidence Program.

A new legal support hub for survivors will be backed by $49.4 million, and $34.5 million is allocated to refurbish the flood-damaged John Madison Tower and Downing Centre courts.

Government Ramps Up Disaster Defence Spending

Mookhey said NSW now spends 1,000 percent more on disaster response than six years ago.

This budget includes $42.2 million for a new 24-hour fire station at Badgerys Creek, staffed by 52 firefighters. Fire and Rescue NSW will receive $35.9 million, the Rural Fire Service $34.4 million, and $6.4 million is set aside to maintain the Emergency Alert System.

Police services will benefit from $50 million in modernisation, $46.3 million for a new ocean patrol vessel, and $6 million for upgraded communication and data systems. “This government is backing our first responders,” Mookhey said.

No New Cost-of-Living Rebates

Defending the lack of new cost-of-living measures, Mookhey said the greater concern was now “low economic growth” rather than inflation. He noted that existing federal and state programs—including the $150 energy rebate, battery subsidies and first-home buyer grants—still offer relief.

However, the $60 weekly toll cap, introduced in January 2024, will end in January 2025. So far, the cap has saved drivers about $139 million. The government has set aside $58 million for toll reform and establishing a new motorways entity.

The state is also attempting to exit several toll road contracts, which currently costs $130,000 per week in legal fees.