NSW: Govt says seventh consecutive Budget surplus expected = 2

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NSW: Govt says seventh consecutive Budget surplus expected = 2

NSW's strong budgetary position meant the impacts were able to be absorbed and sincethe last budget the government had been able to increase expenditure in areas includingeducation, community services and public transport, Mr Egan said.

He said the government's general underlying net debt was expected to fall by about$890 million in 2002-2003, while the net worth of the government sector would reach the$100 billion mark for the first time.

"We have the highest net worth of any government in Australia," he said.

But there were some factors expected to adversely affect this year's final state budget result.

Mr Egan said the global economy still had some significant question marks against it,there was the ongoing impact of the state's drought and it was anticipated there wouldbe a slow-down in the property market.

"The ongoing impact of the drought ... will have a dampening effect on both Australia'seconomic growth and the economic growth in NSW," he said.

"We would also be anticipating some slow-down in the property market, which for a numberof years now has been trundling along well above anybody's expectations, but sooner orlater that has to slow down to I think a more moderate level of activity."

The drought crisis across Australia was expected to slash 0.7 per cent from NSW's economicgrowth figure while stronger than expected revenue figures were mainly due to stamp dutyearnings in a strong property market.

Mr Egan said a decline of about 10 per cent in stamp duty revenue was being factoredin for next year's budget forecast after the expected downturn did not eventuate thisfinancial year.

"We've factored in a slowdown in every budget for the last five or six years, so theproperty market has exceeded anybody's expectations for that period," he said.

Mr Egan also said the opposition's $5 billion in spending promises made ahead of nextyear's state election would have resulted in a net deficit if realised.

"You couldn't have kept the budget in the black (and) you couldn't have afforded therecent pay increases for nurses without either increasing taxes or going into the red,"

he said.

AAP as/nf/gl/sb

KEYWORD: ECONOMY NSW 2 SYDNEY