Budget NSW: How a State Government is distancing itself from Anthony Albanese

NSW Labor has done its best to distance itself from Anthony Albanese as it delivered its last State Budget before it faces voters early next year.

Six weeks after Federal Labor delivered a Budget of broken election promises, State Treasurer Daniel Mookhey took a swipe at the Prime Minister, a NSW native, and his Commonwealth counterpart Jim Chalmers.

“We like to be predictable and provide as much certainty as we can, regardless of whatever wider dynamic there is in the community and whatever wider dynamic there is in Federal Parliament,” Mr Mookhey told reporters on Tuesday.

Federal Labor’s plans to restrict negative gearing to new properties from July 2027, and replace the 50 per cent capital gains tax discount with a minimum 30 per cent tax on inflation-adjusted gains isn’t just unpopular with many property investors.

It’s also infuriating the State Labor Government, which is particularly reliant on property stamp duty revenue.

Falling house prices in Sydney, Australia’s most expensive property market, are bad for the State’s tax collectors.

NSW is set to reap $5.4 billion less from stamp duty over the coming four financial years, meaning a bigger deficit for the upcoming financial year.

Stamp duty is forecast to contribute $12.6 billion to NSW coffers in 2026-27 — or 24 per cent of the $52.1b in overall tax collection.

That’s down from a 27.5 per cent share this financial year.

The NSW Budget papers didn’t specifically mention the Federal Budget, instead putting the blame for falling stamp duty revenue on the Reserve Bank’s three interest rates rises this year.

But with state’s voters going to the polls in March, NSW Labor has lumped Mr Albanese in with Reserve Bank governor Michele Bullock and US President Donald Trump.

“I repeat, from our perspective, interest rates and the global economy are definitely having an effect, and we would welcome more certainty from the RBA, more certainty about the Middle East, and more certainty of this course when it comes to Federal policy,” Mr Mookhey said.

Hours after he delivered his fourth NSW Budget, the Greens announced they would pass Federal Labor’s contentious tax changes through the Senate, despite Mr Albanese ruling out changes ahead of the 2022 and 2025 elections.

With an eye to his own re-election in NSW, Premier Chris Minns in Parliament touted a $100 discount for private car registration, a reduction in the weekly motorways toll cap from $60 to $50 and freezing Opal public transport fares.

“Something we promised to do in the election campaign we are delivering it with this Budget, Mr Speaker,” he told Parliament after the Budget was delivered.

Mr Minns was meant to be taunting the Coalition across the parliamentary chamber in Macquarie Street, but he might as well have been having a dig at Federal Labor for breaking election promises on negative gearing and the 50 per cent capital gains tax concession.

State Labor governments in NSW have a harder time getting re-elected when their own side is in power at a Federal level.

The last time Labor was re-elected in NSW, when Labor was in power in Canberra, was in 1984 when Neville Wran was premier and Bob Hawke was a popular prime minister a year away from introducing a capital gains tax that wouldn’t be taken to an election.

With One Nation now outpolling Labor at a Federal level, Mr Mookhey also conceded voters in NSW upset at the cost of living could conceivably vote Labor out at the next State election, after just one term in power.

“Well, I think it’s clear that politics is undergoing a sea change nationally and in a State level and ultimately, it’s a reminder to the Finance Minister, to myself, to the Government that it’s the voters who get to decide their government in this democracy, and if the voters are not happy, they’ll throw us out, and as they have every right to do so, we work for them,” he said.

Differentiating NSW Labor from the Federal ALP brand certainly won’t hurt its chances, giving they’ll be facing the voters more than a year before the Albanese Government does.