Each Budget is a moment in time. But the real work of governing happens in sequence.
This Budget continues the journey embarked upon in our first: restoring essential services, rebalancing public finances, and laying the foundation for long-term growth.
In Budget one, we reset. We began repairing a State budget that had been left with unfunded programs, soaring debt and broken service delivery. We made hard decisions to restore stability and credibility: ending the wages cap, redirecting resources, and lifting frontline pay so we could rebuild the public services people rely on.
In Budget two, we responded. We faced a $12 billion GST cut as we wrote the papers – the single biggest federal shock to New South Wales’ revenue base in a generation. But we held our course. We kept inflationary pressure down, reduced expense growth, and delivered major investments in housing, health and education.
Now in Budget three, we accelerate. This Budget is about sequencing reforms to maximise growth. It is about coordinating housing, water, energy, transport, manufacturing and technology – the vital systems that empower our people and secure our prosperity.
This Budget invests in the services our people rely on – better hospitals, better schools, and a stronger public sector.
We are providing help with the cost of living – where and when it counts.
We are building the roads, the rail, and the homes that growing communities need.
And we are modernising our economy – and making sure that people have the skills and education to thrive in it.
And all this means, that at a time of global churn – at a time when stability is prized and predictability commands a premium – New South Wales is one of the best places not just to live, but to invest.
That’s the opportunity that underpins our strategy.
This Budget sends a clear message.
We are ready to partner with those who want to invest in the future of New South Wales – and the future of our people.
We are thinking long term.
We are planning for the long term.
And we are building a better New South Wales for everyone.
The Hon Daniel Mookhey MLC
NSW Treasurer
Sources: Australian Bureau of Statistics, 2021 Census. Data across this snapshot reflects the most recent 12-month period available. Time periods may vary.
The population is fairly equally distributed. From smallest to largest we are shown ages 20 to 29 with 14%, 65+ with 17.7%, 30 to 44 with 21.3%, 19 to 45 with 23.3% and the largest group is zero to 19 with 23.6%.
Sources: Australian Government, NSW Government.
Having inherited a $15.3 billion budget deficit, the largest ever passed from one government to another, the 2025-26 Budget outlines a responsible path back to a moderate surplus.
The budget turnaround is supported by a $9.4 billion reduction in the debt projected prior to the last election under the former Government.
The NSW Government will save more than $400.0 million in interest payments every year, allowing us to make record investments in essential services while presenting a sustainable pathway to surplus.
The 2025-26 Budget also lays the foundation for our future economic growth with measures that facilitate rapid investment, create jobs, and accelerate the delivery of new homes.
Following a global pandemic, bushfires, floods, high inflation and interest rates, families and businesses in New South Wales are under pressure.
We are now seeing the first signs that the NSW Government’s fiscal consolidation strategy has avoided additional pressure on inflation without restricting wage growth or increasing joblessness. Inflation declined to 2.3 per cent in the March quarter of 2025.
Bar chart showing the NSW budget result from 2021–22 to 2028–29. The budget result is shown in deficit from 2021–22 to 2026–27. The budget result is projected to return to a surplus of $1.1 billion in 2027–28. In 2028–29 the budget result is also projected to be $1.1 billion.
Having made progress to address inflation and fiscal repair, New South Wales enters a new economic challenge. Now is the time to secure New South Wales’ future economic growth.
The 2025-26 Budget lays the foundation for our economic success with:
Bar chart showing general government expenses and growth per financial year from 2011–12 to 2028–29. In the four years leading up to the COVID-19 pandemic, NSW general government expense growth averaged 6.2%. NSW general government expense growth peaked in 2021–22 at 25%. Expense growth is projected to decrease to an average of 2.4% over the five years to 2028–29. Overall expenses have grown from $59.6 billion in 2011–12 and this graph shows this continuing to $136.1 billion in 2028–29.
Expenses growth is projected to be contained at an average rate of 2.4 per cent per year over the next four years, well below the 6.2 per cent average per year under the former Government in the four years to 2019-20.
Bar chart that compares gross debt from the 2023 Pre-Election Budget Update with the current 2025–26 Budget, from June 2023 to June 2026. It also shows current budget projections to June 2029. The 2023 Pre-election Budget Update projected gross debt to grow to $188.2 billion by June 2026. The 2025–26 Budget projects that gross debt will be $178.8 billion by June 2026. This is $9.4 billion lower than the previous projection. The 2025–26 Budget projects that gross debt will grow to $199.7 billion by June 2029.
The NSW Government’s commitment to responsible budget management has allowed for the next step towards rebuilding our essential services after 12 years of neglect. Major investments in child protection, TAFE, education and healthcare headline the 2025-26 Budget.
Gross debt is down $9.4 billion from the projection in the Pre-Election Budget Update. This has been achieved while investing in an essential infrastructure program that exceeds $30.8 billion in 2025-26.
Lower debt allows for more than $400.0 million per year in avoided interest expenses to be redirected towards essential services. This has allowed for investments including:
for a Pre-Sale Finance Guarantee to help housing developments get finance earlier, fast-tracking more than 5,000 homes and creating 1,500 jobs
to build and upgrade health infrastructure over the next four years
for New South Wales schools over the next 10 years
investment in 2025-26 for TAFE to grow the skilled workforce we need
to build and upgrade roads across Western Sydney
the Investment Delivery Authority expects to assist around 30 large projects per year, potentially bringing forward up to $50.0 billion of investment each year
child protection package to rebuild the out-of-homecare system and better care for our most vulnerable children
to support victim survivors and build a safer New South Wales
The NSW Government will guarantee pre-sales for up to $1.0 billion of approved housing projects on a rolling basis, allowing developers to secure finance earlier and commence construction more quickly. This could help fast track more than 5,000 homes over the next five years and create over 1,500 jobs.
This Budget provides $83.4 million to accelerate planning approvals, including for large-scale market, social and affordable housing projects. This includes $10.6 million for the newly established Housing Delivery Authority, which has sped up planning approval for 53,500 homes across 136 residential projects since January.
The Budget also invests:
This is in addition to existing investment of $450.0 million for build-to-rent dwellings for essential workers.
An investment of $145.0 million will support the ongoing work of the Building Commission NSW to reform the building and construction industry and give homeowners confidence in the quality of new construction.
More housing requires more skilled workers and innovation in construction. A $1.2 billion investment in TAFE will grow the skilled workforce we need to build more homes and infrastructure. This includes $40.2 million to continue fee-free apprenticeships and traineeships for priority qualifications.
The NSW Government is continuing its audit of surplus government land to identify well-located sites that are suitable for housing with an additional $7.6 million. To date, the Government has released land with potential to deliver more than 8,200 new homes.
Developers who build approved infrastructure to enable housing will be eligible for offsets on their Housing and Productivity Contribution.
The Government’s rental reforms are reducing or eliminating unnecessary fees imposed on New South Wales’ 2.3 million renters. This includes by providing fee-free ways to pay rent, banning fees before entering a tenancy and limiting rent increases to once per year. This is supported by the nation’s first Portable Rental Bonds Scheme.
The NSW Government is also extending land tax concessions for new build-to-rent developments.
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First home buyer support 3D-printed social homes | |
The new 10-year Better and Fairer Schools Agreement injects $10.4 billion of funding into New South Wales public schools over the next 10 years.
The NSW Government is adding $5.6 billion alongside $4.8 billion from the Australian Government.
In just two years in Government, average funding per student has increased from $14,819 in 2023 to an estimated $17,022 in 2025.
Teacher vacancies across New South Wales have been reduced by 40 per cent since 2023.
This Budget continues the historic investment in school infrastructure to respond to the enrolment growth audit which showed schools had not been built where they were most needed.
This includes a record $9.0 billion of school infrastructure investment over four years for new and upgraded schools.
A further $50.0 million will expand high potential and gifted education opportunities at more public schools across the State, bringing total program funding to $100.0 million. This program is already delivering specialist school facilities at six metropolitan and seven regional New South Wales schools with another 20 schools included in this year’s Budget.
Investment in TAFE has now increased for the third successive year, to $2.8 billion in 2025-26. This is critical to grow our skilled workforce including to build the homes and
infrastructure we need.
This Budget includes funding for $480.4 million over four years for asset renewal and critical capital maintenance, including $100.0 million to relocate Bankstown TAFE.
This investment is on top of $215.9 million for 1,300 apprentices and trainees in local government, funded in last year’s Budget.
The NSW Government is stepping in to fix the early childhood education and care market. This includes the largest expansion of public preschool in the State’s history and better regulation of private and not-for-profit services.
The NSW Government is continuing to deliver on its commitment for 100 new public preschools.
A further $10.0 million in 2025-26 will progress work on expanding the public provision of early childhood education and care.
$200.9 million will increase First Nations access, enrolment and attendance in early childhood education.
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New preschools Teacher vacancies Merged and cancelled classes | |
The NSW Government will invest $12.4 billion to build and upgrade health infrastructure over the next four years, with $3.3 billion in 2025-26.
New capital investment in health includes:
The Essential Health Services package invests $836.4 million in 2025-26 to support core health services and reduce overdue surgeries. It also funds the opening of new and upgraded hospitals including the Sydney Children’s Hospitals at Randwick and Westmead, Gunnedah Hospital and the Statewide Mental Health Infrastructure Program.
An additional $9.5 million will create an internal health locum agency to improve workforce coordination and retention. We are relieving pressure on emergency departments by creating more pathways to care. Virtual care is allowing people to be treated quickly and wherever they are.
This Budget expands maternity services:
This Budget invests in a stronger regional healthcare system:
This Budget increases investment in mental health services in New South Wales with:
$669.8 million will continue delivering infrastructure required to progress key mental health reforms for improved mental health care. This includes child and adolescent and older persons services, forensic services, and facilities to promote recovery and enhance opportunities for people to transition to or receive care within the community.
A $344.0 million package will better support injured workers, including to restore the independence of SafeWork NSW, ensuring it is resourced to protect workers from harm, including psychosocial hazards.
 | Ending Privatisation |
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| The Government has prohibited further public-private partnerships being imposed on the State’s acute hospitals, preventing Northern Beaches Hospital style arrangements. | |
This Budget invests $522.2 million to improve public transport. This includes:
Funding for Western Sydney roads now totals $5.5 billion. This Budget provides $2.4 billion in new and improved roads, in partnership with the Australian Government. This includes additional funding to deliver the following projects, with total project costs of:
Australian Government funding will allow New South Wales to deliver:
Upgrade plans will be funded for:
This Budget continues investing in road safety with $731.7 million in 2025-26 jointly with the Australian Government. This will provide thousands of kilometres of line markings, school safety infrastructure and crash barriers.
$58.0 million will establish, operate and manage the NSW Motorways Entity and continue the Toll Reform Program. Since the $60 toll cap began in January 2024, motorists have saved $139.0 million.
Reliable, renewable and affordable energy is key to our economic future with increased productivity, higher standards of living and lower emissions.
This Budget continues the Government’s investment in the Electricity Infrastructure Roadmap, transforming our electricity system to provide clean, reliable and affordable energy.
This Budget includes continued investment of $2.1 billion over the next four years in the Transmission Acceleration Facility, primarily to support the five Renewable Energy Zones at Central-West Orana, New England, Hunter-Central Coast, Illawarra and South West. This builds on the $1.1 billion invested to date on these critical projects.
This investment completes the financing arrangements of the Central-West Orana Renewable Energy Zone transmission project, unlocking $20.0 billion in private investment into the Central-West Orana region by 2030, and supporting more than 5,000 construction jobs at its peak. Ten new projects, which will deliver over seven gigawatts of renewable generation and storage, have been awarded access rights. They will provide enough power for two million homes each year.
To support the construction of the Central- West Orana Renewable Energy Zone, the Budget invests an additional $115.5 million to build a logistics precinct at the Port of Newcastle that will facilitate storage and transportation of critical components. This project is expected to deliver around 90 construction jobs and 20 full-time positions once operational.
It is important that the benefits of Renewable Energy Zones are realised by local communities. The NSW Government is continuing the Community and Employment Benefit program and has allocated $128.0 million to communities which will host the Central-West Orana Renewable Energy Zone, with future funding for the other Renewable Energy Zones host communities.
The Budget also includes an additional $579.0 million from the Australian Government to extend the national Energy Bill Relief payment, providing all households and eligible small businesses with energy bill rebates up to $150 between 1 July and the end of 2025.
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New South Wales has been experiencing a run of the most devastating natural disasters in its history.
In the six years since the unprecedented 2019-20 bushfires, the NSW and Australian Governments have spent $9.5 billion providing disaster relief and recovery across the state. That averages $1.6 billion per year – more than a 1,000 per cent increase compared to $154.0 million per year in the prior six years.
This Budget also outlines a further $4.2 billion of disaster relief across the forward estimates, a figure that is likely to increase in response to both previous and potentially new natural disasters.
Since coming to office, the Government has approved an additional $8.2 billion in expenditure to support recovery from natural disasters.
In partnership with the Australian Government, the NSW Government is providing critical relief and recovery support to communities impacted by Tropical Cyclone Alfred and recent flood events.
The NSW Government is investing to improve our ability to respond and protect communities during emergencies, with:
The Government continues work on the design of a replacement levy informed by tax modelling and consultation with industry and the wider community.
Out-of-home care (OOHC) provides alternative care for children and young people who are unable to live safely at home. The child protection system has often failed to consistently meet the needs of vulnerable children and young people.
The Government’s major reforms aim to create a world-class system – one that supports children in stable, supportive environments, and enables recovery and restoration for more families.
These reforms have led to there being no children in unaccredited emergency accommodation as of April 2025 – for the first time in 20 years, and a 35 per cent decrease in the use of high-cost emergency arrangements since November 2023.
The system has also recruited an additional 240 emergency foster carer households to provide stable, carer-based emergency support.
A $1.2 billion child protection package will begin the process of rebuilding the OOHC system and improving outcomes for the state’s most vulnerable children:
These measures are in addition to the $4.1 billion in cash and in-kind contributions budgeted in 2025-26 for individual support packages and other services delivered under the National Disability Insurance Scheme.
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Portable long service leave From 1 July 2025, community sectors workers will have access to a portable long service leave scheme. $30.2 million will build a new digital platform to support the program and attract workers to the sector. | |
| Ending Privatisation |
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| The Government has banned the use of unaccredited emergency accommodation for vulnerable children in the out-of-home care system. | |
This Budget invests over $650.0 million to support victim-survivors and build a safer New South Wales.
An additional $100.5 million is being provided to address rising demand in the corrections system, driven by an increase in alleged offenders (including domestic violence) both in custody and in the community. This funding will also sustain Corrective Services NSW supervision and service delivery to support rehabilitation and community safety.
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The 2025-26 Budget includes a record $731.8 million to support First Nations communities in New South Wales and build upon previous spend to improve outcomes.
The total Closing the Gap package is now $246.8 million.
This Budget includes a significant further investment in Closing the Gap, with $202.4 million of new funding.
This includes:
In addition to the Closing the Gap package, this Budget includes $484.9 million of investment for First Nations communities, including:
• $61.9 million over four years to support and improve whole-of-government native title claims management, policy and governance, supporting land justice and cultural economic aspirations for native title groups.
These investments reflect the Government’s ongoing commitment to work in partnership to improve outcomes for First Nations communities through shared decision-making, culturally responsive services and community-led initiatives.
The 2025-26 Budget delivers on the NSW Government’s commitment to protect and restore our natural environments.
We are investing an additional $91.3 million to renew and upgrade visitor infrastructure in national parks to provide unforgettable nature-based experiences with new and improved walkways, camping grounds, picnic facilities and amenities. The Government is also funding:
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A calendar of events supported by Destination NSW, including:
And many more sporting, cultural and artistic events confirmed for 2026. | |
The NSW Government is continuing to provide cost-of-living relief. Immediate support is matched by longer-term initiatives to improve housing affordability and lower energy costs.
The Government’s rental reforms are reducing or eliminating unnecessary fees imposed on renters. This includes by providing fee-free ways to pay rent, banning fees before entering a tenancy, and limiting rent increases to once per year. This is supported by the nation’s first
Portable Rental Bonds Scheme.
From 1 July 2023 to 1 June 2025, more than 44,500 first home buyers, who purchased a home for up to $800,000 or vacant land up to $450,000, have received a transfer duty exemption or concession. More than 17,600 first home buyers, who purchased a home valued between $800,000 and $1.0 million received a transfer duty concession. In total, over 62,000 first home buyers have had their purchasing power boosted by an average transfer duty saving of around $20,500, or a total of $1.3 billion in support to first home buyers across New South Wales. The concessions and exemptions will continue to support more people to purchase their first home.
The NSW Government’s energy social program supports up to 1.0 million households per year and has delivered $693.2 million in cost-of-living support over the last two Budgets. This provides additional relief to households alongside the extension of the $150 national Energy Bill Relief payment to the first two quarters of 2025-26.
In its first eight months, the Bulk-Billing Support Initiative has provided around $4.0 million worth of payroll tax savings for GP clinics that enable them to provide more bulk-billing appointments for the community. This is in addition to commuting more than $100.0 million in historical payroll tax liabilities for contractor GP wages.
Since 2023, the Government has delivered significant industrial relations reforms, including:
Reaching multi-year agreements for better pay and conditions provides certainty and financial security to our public sector workforces. It also attracts and retains highly skilled and qualified workers and reduces vacancies, supporting:
In 2025-26, the NSW Government will assist households with cost-of-living pressures through dozens of measures, including:
Image credits:
Austockphoto; Copyright State of New South Wales (Transport for NSW); Destination NSW; EnergyCo / Toby Zerna; Forbes Shire Council; NSW Department of Education; NSW Health; NSW Police Force; NSW State Emergency Service; Renee Nowytarger; Sydney Metro.
NSW Treasury pays respect to the Traditional Custodians and First Peoples of NSW and acknowledges their continued connection to country and culture.