NSW battle-ready as cuts loom

Joe Hockey could have a fight on his hands with his home state if he follows through on plans to slash state school and health funding in his second budget

NSW has a good idea of the sweeteners Joe Hockey will send its way in his second federal budget offering, with billions already on offer for the state government's flagship roads project, WestConnex.

It's the surprises that could prove harder to swallow.

Mr Hockey last year flagged $80 billion in cuts to hospitals and schools over the decade to 2024-25, and NSW, as the first state to sign up to the Gillard-Labor government's generous Gonski education reforms, has much to lose.

Big cuts will put NSW Treasurer Gladys Berejiklian - who is seen as being close to her north shore neighbour - in a tough position as she prepares to hand down her first state budget next month.

"The NSW government remains deeply concerned over the Commonwealth's decision to pull billions of dollars of funding from the state's health and education services," Ms Berejiklian told AAP.

"We will continue to fight for the people of NSW and we make no apology for that."

NSW has already locked in $1.5 billion of federal funding along with a concessional loan worth up to $2 billion for WestConnex, an ambitious roads project aimed at better linking Sydney's west to the city's airport and ports precinct.

Also Premier Mike Baird's plan to lease 49 per cent of the state's poles and wires will unlock $2 billion in federal funds, thanks to Mr Hockey's asset recycling scheme.

But Ms Berejiklian says any additional infrastructure-building boost from the commonwealth would be a pleasant surprise.

"The NSW government will always welcome federal funding for our major infrastructure projects," she said.

WHAT NSW WANTS:

- Contributions towards its $15 billion WestConnex project

- A $2 billion reward for the planned partial privatisation of electricity infrastructure

- Windfall boosts to the state's infrastructure-building coffers

WHAT NSW DOESN'T WANT:

- Cuts to health services and schools

- A dip in the state's share of GST revenue; this is viewed as unlikely.


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Source: AAP


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