NSW Treasurer Eric Roozendaal announced last week that the NSW Treasury had released audited budget results for 2007-2008. The results shows a dramatic weakening in the State's budget position, with the surplus shrinking to $73 million from a projected $700 million in May.
Treasurer Roozendall stated that the primary reasons for the shortfall were:
- a $160 million shortfall in transfer duty revenue mainly occurring during May and June
- a $222 million shortfall in investment income from the NSW Self Insurance Corporation mainly due to significant falls in share values
- $320 million cost overruns in Health
- an additional $150 million grant to RailCorp.
The very large overruns in Health costs would appear to explain the recurrent stories about health institutions unable to pay for immediate needs whether bandages or stamps.
Weak property prices, together with fewer property transactions, mean that the shortfall in transfer duty revenues has continued - $90 million below forecast in July, $103 million in August, $77 million in September.
According to Imre Salusinszky in The Australian, these lower revenues mean that the budget two months into the financial year is in deficit to the tune of $163 million, making the projected $268 million surplus for 2008-09 out of reach in the absence of cuts to recurrent spending -- which is likely to mean agency amalgamations and public service job cuts.