2021-22 Half-Yearly Review

NSW is bouncing back stronger

Following the 2021-22 Budget, New South Wales was hit by another COVID-19 outbreak – this time, the more contagious Delta variant. To reduce transmission and keep people safe, the NSW Government put additional health measures in place, including restrictions on activity in Sydney and regional New South Wales.

The measures contributed to a contraction in economic activity in the September quarter of 2021, although the impact was less severe than seen in 2020. The forecast is for a swift and robust recovery. State Final Demand is forecast to exceed pre-Delta levels within the next six months, which should drive a similar recovery in the labour market.

To support communities and businesses of New South Wales through the Delta outbreak, the Government has delivered more than $10 billion of support in response, inclusive of Commonwealth support for JobSaver.

While these measures have provided significant support to the economy, the response and recovery effort has led to a deteriorated operating position since Budget. However, most of the impact is contained to 2021-22, where the deficit has increased to $19.5 billion. The Government remains on track to deliver a surplus in 2024-25.

The emergence of the COVID-19 Omicron variant adds significant uncertainty to the fiscal and economic forecasts, as will future variants of COVID-19.

COVID-19 Economic Recovery Strategy

In October 2021, the NSW Government announced a $2.8 billion  COVID-19 Economic Recovery Strategy - our plan for a strong recovery for NSW.

The strategy contains targeted and timely support to those most impacted by the health and economic ramifications of COVID-19. Over the medium-to-longer term, the NSW Government is focused on improving our economy’s productive capacity and workforce participation to rebuild stronger.

Read the COVID-19 Economic Recovery Strategy here.

Opportunities For Future Reform

The 2022-23 Budget will be handed down in June 2022. It will set out the next phase of the Government’s fiscal and economic strategy. The 2020-21 NSW Intergenerational Report identified several opportunities that could lift economic productivity, including:

  • improving housing affordability
  • increasing productivity
  • increasing the workforce participation rate, particularly amongst women
  • addressing climate risks
  • managing the transition to net zero.

Delta Outbreak Support Delivered

inclusive of Commonwealth support

Credit Ratings


Moody's & Fitch

Back to Surplus in




2021-22 Half-Yearly Review


Insights from the 2021-22 Half-Yearly Review