NSW budget to plunge into bigger deficit
The NSW budget will plunge further into deficit as the government attempts to spend its way out of trouble during the global recession.
But the opposition blames the higher than originally projected budget deficit on Labor's financial mismanagement, not just the financial crisis.
Treasurer Eric Roozendaal declined to specify the budget shortfall to be announced on June 16, after reports the state is expected to record a deficit of almost $2 billion.
In last November's mini-budget, Mr Roozendaal predicted a $900 million deficit for the current cheap basketball shoes financial year.
However, on Friday he said NSW was facing the worst economic downturn in the past 75 years and "things are going to get worse before they get better".
"We will take the budget into deficit," Mr Roozendaal told reporters in Sydney on Friday.
"It will be substantially higher than mid-year projections, this year's deficit. Our priority will be jobs. That is the appropriate response.
"What we will do is make sure we maximise our infrastructure spend, our projects to encourage jobs to NSW."
Mr Roozendaal said NSW planned to use its four-year $56.9 billion infrastructure investment program to "sustain" 150,000 jobs every year.
He said the government planned to use a federal guarantee for future borrowings offshore and added there were no plans to increase taxes or charges.
But he would not speculate on whether the treasury would forecast a surplus for 2011 or say whether he was confident NSW would maintain its AAA credit rating.
Opposition Leader Barry O'Farrell said NSW's unemployment rate had risen to 6.9 per cent and 380 jobs had been lost per day since Premier Nathan Rees became premier.
"Mr Roozendaal and Mr Rees's claim that we have a $56 billion record infrastructure project offers no comfort for the people of NSW, because we've heard it time and time cheap nike shoes again over the past 14 years and we've failed to get any results from it," Mr O'Farrell told Nike Zoom LeBron Shoes reporters in Sydney on Friday.
He said the government had squandered $17.5 billion in extra revenues and failed to deliver on promised infrastructure.
"The community is about to suffer, not just from the global financial crisis, but from Labor's incompetence in state finances over the past 14 years," Mr O'Farrell said.
The government must stimulate economic activity and boost tax revenue after failing to tackle issues of regulatory reform and managing finance, he said.
"Today we have nothing to show for it, no reserves to assist us through these difficult times."
He said Mr Roozendaal's "speculation" about the state's AAA credit rating made "it almost certain it's about to be lost".
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