RA NSW Budget Brief

Budget Context

The first budget of the Minns Labor Government has been handed down following the March 2023 election. The budget comes at a time when state governments across the nation are grappling with broad economic challenges including large debt burdens incurred as a result of the COVID-19 pandemic. Additionally, the Commonwealth infrastructure pipeline is under review, with states and territories currently involved in the consultation process with the independent reviewers.

The Budget is now forecast to return to an $844m surplus in 2024-25 through a $4b improvement in the Budget bottom line over the next four years.

Overall for the transport infrastructure sector, there is only minimal changes with the Minns Government as they, in the words of Treasurer the Hon. Daniel Mookhey MLC, concentrate infrastructure investment on “schools, hospitals and public transport.”

Important announcements impacting the roads sector are outlined below.

NSW Strategic Infrastructure Review

Earlier this year the NSW Government commissioned Mr Ken Kanofski to undertake a review of the state’s infrastructure pipeline in light of the significant challenges facing the infrastructure sector and the broader economy. Roads Australia was consulted by Mr Kanofski as a part of this review.

The Kanofski Review was tasked with identifying projects and programs that should no longer proceed, be delayed or have their scope altered.

After receiving the review the NSW Government has decided to delay or descope projects worth over $ 2.5b including the Great Western Highway Duplication and the Fast Rail Program.

Budget papers also indicate that the review also recommended more coordinated decision-making between all infrastructure stakeholders and a stronger alignment between infrastructure planning and housing, to meet the complex housing supply and affordability challenge. As a result the Minns Government has stated that they will look at business case and planning processes to ensure resources are dedicated to priority projects that demonstrate strong value for money.

In addition, the final Sydney Metro Review (the Sydney Metro was exempted from the Kanofski Review) is expected to be tabled before the end of the year. An additional $1b in funding has been allocated to Sydney Metro City and Southwest as a result of the interim report which was released at the beginning of August.

BP3 p. 14 – Infrastructure program from 2011-12 to 2026-27

Transport Investment

The NSW Government’s state capital program is projected to deliver $116.5b of infrastructure investment by 2026-27.

Transport infrastructure will continue to be a major focus with 62 per cent of the four-year infrastructure capital expenditure dedicated to the transport agency group.

This includes continued large scale investment in Sydney Metro City and Southwest and the Western Harbour Tunnel.

The capital expenditure for transport across the 2023-24 financial year is $19.3b with the rolling four year expenditure set at $72.3b. Both these figures are slight reductions from last year’s budget, with several transport infrastructure projects impacted by the Kanofski Review and the outcomes of the Infrastructure Investment Program Strategic Review yet to be made public.

Key new transport projects commencing in 2023-24

New road investment in the 2023-24 Budget is headlined by the $770m Urban Roads Fund which has reserved funding for 23 road projects over the next four years. This package of funding also includes $200m over two years for the Western Sydney Floods Resilience Plan.

Several other new transport projects have been funded in the 2023-24 Budget (BP3, p.59), as outlined below with the expected four-year expenditure:

–          M7-M12 Integration Project ($106.2m)

–          Bells Line of Road Upgrade Program ($100m)

–          Western Distributer Smart Motorway ($95.7m)

–          Richmond Road, Elara Boulevard to Heritage Road ($58m)

–          Regional Roads Fund ($46.6m)

Electric vehicle charging infrastructure

The Budget includes a $260 million investment to increase the uptake of electric vehicles by increasing access to charging infrastructure.

The NSW Government will abolish electric vehicle purchase incentives from January 1 2024, aligning with Victoria, to instead focus on infrastructure investment for drivers in regional NSW, renters and people who live in apartments and those who do not have access to EV charging infrastructure.

This reform will underpin the rollout of the new NSW EV Strategy which will be formulated in collaboration with industry.

Regional road investment

The Budget includes new funding for regional roads, supporting regional councils in managing existing assets and rebuilding following widespread natural disasters, causing extensive damage to the rural and regional road network.

The regional roads investment is highlighted by the following:

–          $390m to establish the Regional Emergency Road Repair Fund

–          $334m to establish the Regional Roads Fund

–          $33.9m to replace aging timber bridges through the Fixing Country Bridges program

–          $29.4m to support the transition to Zero Emission buses

–          $20.2m to continue the Transport Connected Bus Program

–          $10m to improve the network of heavy vehicle rest stops across regional NSW

This investment in the regional road network is welcomed by RA, following its submission to the Commonwealth ‘Inquiry into the implications of severe weather events on the national regional, rural and remote road network’, which highlighted the need for further support to local councils and more resilient regional road networks.

Introduction of toll cap

The Minns Government will deliver on its toll cap election commitment, allowing motorists to claim back any toll expenditure above $60 per week, receiving a quarterly refund from Service NSW.

This has been made possible through the allocation of $561m in the 2023-24 Budget for the next two calendar years, beginning on January 1 2024.

Trucks will receive a rebate for a third of their trip travelled on the M5 East and M8, costing $54 million over the two-year trial.

The NSW Government has undertaken an independent review of toll roads by Professor Allan Fels AO and Dr David Cousins AM, with a discussion paper released in June this year.

Active Transport

Finally, the Budget includes $97.9m over the next four years for active transport projects. This increased funding includes the delivery of both the Sutherland to Cronulla Active Transport Link (SCATL) Horizon 3 and the Sydney Harbour Bridge Northern Cycle Ramp.

The NSW Government has stated its commitment to increasing active transport options, creating connected centres and neighbourhoods as part of a more sustainable future.

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