NSW Budget 2023-24: Business Summary

Business Government NSW State Budget

Updated September 22nd 2023

The NSW Government presented a series of budgetary initiatives in its 2023-24 Budget for SMEs across NSW to strengthen the state’s economic well-being.

Significant investments in housing, regional health and energy, seem designed to support businesses in attracting workers, improving support for regional communities and keeping energy costs lower.

The Government also upheld its promise of no new taxes or tax increases for business and its pre-election pledge to establish the NSW Business Bureau.

Although questions are being asked around the decision to remove the exemption on company structures and addition of a 10% concessional duty.

Here’s a brief summary of the initiatives outlined in the budget.

Small Business Support

  • Small Business Energy Rebates: The government confirmed funding for previously announced rebates on energy bills for small businesses of up to $650.
  • NSW Business Bureau: Government restated its commitment to establish a new agency to improve small business engagement with government regulation, procurement tendering and grants application processes, as well as engage with overseas markets.  

Tax Integrity & Fairness Changes

  • Land Tax exemption for principal place of residence: 
    • The threshold for claiming Land Tax exemption for principal place of residence has increased from 1% to 25%.  
  • Transfer duty exemptions for company restructures: 
    • The concession will be removed and a 10% duty applied commencing 1 February 2024.
  • Tax compliance:
    • $111.1 million over 4 years to boost Revenue NSW’s tax compliance activities is expected to increase revenue including $337 million from payroll tax and $225 million from transfer duties.

Regional Business Support 

  • Designation of regional Business Hubs: 
    • $212 million goes to Wagga Wagga to encourage sustainable high value agriculture and manufacturing production
    • Moree to receive $224.8 million to become the state’s Northern Gateway and business hub
    • Parkes is supported $332 million to develop its Inland Rail intermodal hub and transform Parkes into a national freight and logistics hub
  • Regional Health Facilities: 
    • $3.8 billion for improvement and new health facilities across regional NSW 
  • New regional-focused funds established: 
    • Creation of a $350 million Regional Development Trust Fund, aligned with Australian Government’s Regional Investment Framework and the $250 million Working Regions Fund 
  • Regional Futures Jobs and Investment Authorities: 
    • Newly established authorities have been funded to guide transition from coal-based economy to alternative economic activities
  • Flood-impacted regional housing: 
    • $150 million for NSW Land and Housing Corporation to deliver replacement, substitute and new social housing in flood-impacted locations 
  • Independent Agriculture Commissioner:  
    • $5.5 million to protect farmland and ensure food security
  • Transmission Acceleration Facility: 
    • $804 million commitment, in addition to $1.2 billion committed under the previous government.
    • This funding will support work in the state’s renewable energy zones including the Central-West Orana REZ, the Hunter Transmission Project and the Waratah Super Battery and is expected to drive 9,000 regional jobs.
    • The expenditure will be recouped from private investors and returned to the facility, allowing it to fund subsequent projects.
  • Energy Security Corporation: 
    • ESC will invest $1 billion ESC to fund storage projects that boost the reliability of the state’s electricity network and address gaps in the market as NSW transitions to renewables. 
  • EV support changes: 
    • Rebates and stamp duty exemptions for EV purchases will end, saving $527 million.
    • $263 million will be spent to deliver its revised Electric Vehicle Strategy including spending on EV charging infrastructure for drivers in regional NSW, renters, people who live in apartments and motorists who do not have access to home charging.   
  • Coal royalties raised: 
    • Increases to coal royalty rates take effect from July 2024 and are expected to raise $2.7 billion over four years.

Growing & Supporting the Workforce

  • Apprentices: 
    • $93.5 million to fund an additional 1,000 apprentices.  
  • Essential services fund: 
    • A new Essential Services Fund will be established, focused on increasing the number of workers in key sectors such as teachers, healthcare workers and bus drivers, at a cost of $3.6 billion.
  • Childcare workforce: 
    • $28.5 million allocated to develop and grow the early childhood education workforce. 
  • icare improvement program: 
    • icare’s multi-year improvement program focusing on effective embedment of governance and risk management, cultural improvements, improved return to work outcomes, improved claims servicing and better outcomes for the customers they serve.

Skills & Innovation 

  • Investment in Education: 
    • $4.9 billion investment in schools across NSW – $1.4 billion of which will be allocated to regions, building 43 new schools, and upgrading a further 86.
  • Investment in Skills: 
    • $112 million for a thorough VET review and additional funding to cover the TAFE funding shortfall.  
  • Tutoring programs: 
    • $278.4 million to fund permanent literacy and numeracy tutoring in primary and secondary schools.

Energy & Environment  

  • Transmission Acceleration Facility: 
    • $804 million, in addition to the $1.2 billion committed under the previous government.
    • The funding will support work in the state’s renewable energy zones including the Central-West Orana REZ, the Hunter Transmission Project and the Waratah Super Battery and is expected to drive 9,000 regional jobs.
    • The expenditure will eventually be recouped from private investors and returned to the facility, allowing it to fund subsequent projects.
  • Energy Security Corporation: 
    • The $1 billion ESC will invest in storage projects that boost the reliability of the state’s electricity network and address gaps in the market as NSW transitions to renewables. 
  • EV support changes: 
    • The government will end rebates and stamp duty exemptions for EV purchases saving it $527 million.
    • In their place, the government will spend $263 million to deliver its revised Electric Vehicle Strategy including spending on EV charging infrastructure for drivers in regional NSW, renters, people who live in apartments and motorists who do not have access to home charging.   
  • Coal royalties raised: 
    • Coal royalty rates increases take effect from July 2024 and are expected to raise $2.7 billion over four years.

Infrastructure & Transport

  • Parramatta Light Rail Stage 2: 
    • $200 million reserved to expedite the planning for procurement, construction and delivery. 
  • Sydney Metros: 
    • Metro CBD and Southwest, Metro West and Metro Western Sydney Airport remain funded in the Budget pending completion of the comprehensive review of Sydney Metro.
    • New estimates of the total costs of these projects were not provided.  
  • Regional Emergency Road Repair Fund (RERRF): 
    • $390 million allocated to regional and rural councils for urgent road and pothole repairs.
  • Regional Roads Fund: 
    • $334 million to build new roads in regional and rural NSW. 
  • Improving access to health services: 
    • Investing $13.9 billion in health facilities including $120.0 million expansion of Blacktown and Mount Druitt Hospital, $190.0 million for upgrades at Royal Prince Alfred Hospital, and $1.3 billion rebuild of Bankstown Hospital.
  • Major projects cancelled and deferred: 
    • Northern Beaches Link tunnel project will not progress under current government, as will Dungowan Dam.
    • The Great Western Highway upgrade and Circular Quay redesign have been deferred, while faster rail initiatives have been handed over to the Commonwealth and will not be progressed by NSW Government.
    • Penrith Stadium rebuild has been replaced with a more modest redevelopment. 

Housing 

  • Housing and Infrastructure Plan: 
    • $2.2 billion investment in new housing and infrastructure to increase housing supply.
    • This includes $300.0 million reinvested dividends to deliver 1,409 affordable homes and 3,299 market homes by 2039-40 via Landcom.
    • $400.0 million in Restart NSW for the new Housing Infrastructure Fund.
    • and $1.5 billion for housing-related infrastructure through the Housing and Productivity Contribution.  
  • Essential Housing Package: 
    • $224 million package to accelerate the delivery of social, affordable and private homes ($70 million);
      • continue to provide housing services for First Nations households – $35.3 million
      • support critical social housing maintenance – $35.0 million
      • provide dedicated mental health housing through Restart NSW – $20 million
      • establish a NSW Housing Fund for urgent priority housing and homelessness measures – $15 million
      • extend the Together Home program – $11.3 million
      • inject funding to Temporary Accommodation in 2023-24 to address homelessness – $11 million
      • inject funding to the Community Housing Leasing Program – $10.5 million
      • deliver faster quality social housing through Modular Housing Trial – $10 million
      • allow Specialist Homelessness Services to address increasing demand – $5.9 million
      • A new agency, Homes NSW, will also be established.
  • Faster Planning Program: 
    • $38.7 million program to establish the NSW Building Commission to support high quality housing and protect home buyers – $24 million
    • assess housing supply opportunities across government-owned sites and delivering new social housing – $9.1 million
    • implement an artificial intelligence pilot to improve planning system efficiencies – $5.6 million 
  • Appointment of NSW Rental Commissioner: 
    • Will work with government to design and implement changes, including implementing a Portable Rental Bonds Scheme and legislating reasonable grounds for ending a lease to protect renters from unfair evictions.  
  • Commonwealth Social Housing Accelerator Program: 
    • $610.1 million to permanently add around 1,500 social housing dwellings. 
  • First Home Buyers Assistance Scheme: 
    • First-home buyers will save up to $30,735 through expanded stamp duty exemptions and concessions (from 1 July 2023).
  • Build-to-Rent trials: 
    • $60 million to trial build-to-rent development initiatives in the South Coast and Northern Rivers regions. 

Cost-of-living Relief

  • Toll relief for commuters and businesses:
    • Long-term toll reform of $615 million to support motorists.
    • A two-year program providing immediate relief through a $60 weekly toll cap for private motorists from 1 January 2024, and a 33% reduction in the truck toll multiplier on the M5 East and M8. 
  • Early childhood education and care: 
    • $60 million for new and upgraded non-government preschools to increase affordable, high-quality preschools in areas of most need.
  • Making communities stronger and fairer: 
    • $13.8 million to improve women’s participation in the workforce. 

Full details on the NSW Budget available at the NSW Government Website.

If you have questions, concerns or to discuss how the budget will impact your business, call your CIB Adviser anytime.