Our strong economy is outpacing other states

New South Wales is in an enviable position. In 2015-16 (the latest data period available) New South Wales enjoyed economic growth of 3.5 per cent, outpacing every other state and territory in Australia. This was the first time in 26 years that New South Wales’ growth topped all other states and territories. It also marked the State’s greatest economic expansion since the 2000 Olympic Games.

The outlook remains strong. Business investment, public infrastructure and dwelling construction are all exhibiting strength, lifting construction activity and employment in the State to record levels. Service exports are also contributing strongly to economic growth, underpinned by overseas visitors and international student enrolments.

The NSW economy will continue to benefit from low interest rates, a lower Australian dollar, strong demand from Asia, above trend population growth and an historically large infrastructure and residential construction pipeline. The key drivers of growth in the near term are forecast to be overseas exports, dwelling investment and public capital expenditure. Further out, business investment, consumption and interstate trade are expected to become stronger drivers of growth.  

Economic growth is creating jobs

Our powerhouse economy is delivering jobs. New South Wales recorded the lowest unemployment among the states for the past two years, trending at around 5 per cent.  

Since April 2011, New South Wales’ employment has increased by 369,600 – more than any other state and accounting for almost 40 per cent of the national increase over this time.

Importantly, New South Wales continues to be the best state for regional employment. Over the two years to April 2017, more than 58,400 jobs have been created in our regions – a staggering 40 per cent of all jobs created in New South Wales over that period and more than all the other states’ regions combined (51,140). 

The NSW job market is expected to further strengthen in line with strong economic growth, and employment is forecast to expand at an above-trend rate of 1¾ per cent in 2017-18 and 2018-19.

The unemployment rate is forecast to remain at around 5 per cent over the next two years, even though migration into New South Wales is expected to remain above trend. 

Housing construction is booming

The Government’s efforts to increase housing supply have helped deliver record dwelling approvals in New South Wales, in the 12 months to April 2017 there have been 72,800 building approvals. Annual housing approvals have now exceeded 50,000 a year for more than three years (40 consecutive months).

Meanwhile, New South Wales is in the midst of the longest housing construction boom in the State’s history. In 2016, housing completions reached record levels of around 60,000, meaning on average, of around 1,100 homes were completed in New South Wales every week.

New dwelling construction is expected to remain at high levels over the next two years, supported by solid population growth, low interest rates, historically high approvals and a large construction pipeline.

Preparing for the challenges ahead

With a strong economy, sound budget position and steady infrastructure pipeline, New South Wales has never been in a better position to consolidate its success and prepare for the challenges that lie ahead. 

That’s why the NSW Government is transforming the way it measures the effectiveness of its expenditure, ensuring that spending delivers real outcomes for the people of New South Wales – such as reduced hospital waiting times, faster trips home and improved education results. The first stage of this important reform has been the implementation of a new financial management system for this Budget, helping the Government make better informed spending decisions.

The Commissioning and Contestability Unit will continue to help the Government make better decisions about how services are provided, ensuring services are designed around – and actually deliver – what citizens need, not just what works for government.

We are also pursuing more innovative ways to deliver services - like eHealth, Service NSW and Smart Motorways – initiatives that provide customers with better services, delivered in a more cost-effective way. 

As our share of GST revenue from the Commonwealth declines over the next four years, the NSW Government supports GST reform that sees distribution moving towards a per capita basis. The current system for allocating GST penalises New South Wales for having the nation’s strongest economy.