NSW Budget - Good for Sydney, but what about the regions?

June 21, 2016

NSW Budget – Good for Sydney but what about the regions?

The NSW Government deserves congratulations for its management of the State’s finances over the last five years and for its focus on investing in critical infrastructure. While this infrastructure spending is welcome, the 2016­17 State Budget fails to address the imbalance in infrastructure spending between Sydney and regional NSW, particularly in mining communities across the state.

“NSW is now in sound economic position, thanks largely to the revenue and jobs generated by the Sydney housing boom over recent years, as well as the billions spent on public infrastructure in Sydney. However, Sydney is receiving billions in infrastructure funding, particularly for transport, while the regions are receiving relatively little,” NSW Minerals Council CEO, Stephen Galilee said today.

Of all the major transport­related State Infrastructure Projects listed in the Budget Papers as either underway or due to commence over the next five years, $36 billion is listed for urban projects including trains, buses, ferries, light rail and roads, with just $900 million listed for transport for projects in regional areas.

“While It’s great that the people of Sydney will benefit from the billions being spent on motorways, tunnels, sports stadiums, convention centres and light rail networks in the coming years, regional communities are missing out on their fair share,” Mr Galilee said.

“And while mining communities across regional NSW delivered royalties totalling $1.16 billion to NSW Treasury in the last financial year, just a fraction of these royalties is being returned to mining regions in infrastructure funding in this budget,” Mr Galilee said.

“Resources for Regions is an important initiative that provides critical public infrastructure funding to regional mining communities that contribute so much to our economy. However in the four years since its inception in 2012, the Resources of Regions​ program has returned just $208 million in funding to mining communities, despite the $5 billion in mining royalties raised over the same period,”​ he said.

“Our 2016­/17 Budget Submission called on the State Government to commit at least $60m per year to the Resources for Regions program. The Government has today re­announced $32 million for the Resources for Regions program, but regional mining communities will be sorely disappointed that there is no new funding commitment from a Government touting a $3.7 billion budget surplus.”

“Mining communities across NSW will be hoping for further funding announcements on Resources for Regions in the very near future,” Mr Galilee said.

“Despite the fall in mining investment over recent years and the impact of low prices due to the resources commodity cycle, mining production and export volumes remain strong, and will continue to and will continue to deliver strength to the NSW economy. Even at current low commodity prices, mining royalties delivered over $1.1 billion to the NSW Treasury in 2015-16, and royalty predictions in this year’s Budget are much more realistic than in previous years, forecasting a modest recovery in the coal price over the forward estimates, and an associated $5.5 billion in royalty revenue.”

“Mining in NSW is the state’s most valuable export industry.  The sector employs over 39,000 people in NSW and mining companies spent around $11.3 billion across the state on wages and business purchases in the last financial year, including $2.8 billion in Sydney,” he said.


“Just as the recent mining investment boom ended, so too will the current Sydney property boom follow its own cycle into slowdown, as it always does. And when the economic stimulus driven by public infrastructure spending in Sydney also slows, our state will need other sectors to continue to generate investment, growth and jobs.”


“The Government should be congratulated for its sound economic management and for focusing on infrastructure investment.  However, our mining communities and regional centres need more support.  Supporting our mining communities with infrastructure investment will be essential as commodity prices improve in coming years,” Mr Galilee said.


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