A roaring property market has driven a big turnaround in NSW's bottom line in the past six months.
But softer real estate conditions will dent future surpluses by more than originally forecast, according to the state government's mid-year budget review.
After predicting a $283 million deficit for 2014/15 in June, Thursday's review revealed the state is on track to record a surplus of $272 million.
The $555 million pick-up was attributed mostly to Sydney's booming property market.
"Higher-than-expected property transfer duties are the significant driver of the 2014/15 surplus forecast. However, it is partially offset by a softening in payroll tax and mining royalties," Treasurer Andrew Constance said.
The review forecast revenue from stamp duty on property transactions to lift by $744 million more in 2014/15 than predicted in June.
Mr Constance also cited the property market in scaling back future surpluses.
According to the review, a $402 million surplus is tipped for 2015/16, compared with $660 million previously.
The updated surpluses of $1.096 billion for 2016/17, and $1.038 billion for 2017/18 were also lower compared with the June budget.
"The health of our property market and the boom that we have seen won't continue forever, and so we've factored in obviously a potential decline from the existing revenue," Mr Constance said.
The mid-year review also shows net debt is forecast to fall to $9.3 billion in June 2015.
This is better than the $12.4 billion predicted at budget time.
Mr Constance also confirmed a proposal for the long-term lease of 49 per cent of the NSW electricity network in response to a scoping study of the plan.
The government says leasing its electricity network businesses will unlock $20 billion to fund state infrastructure projects.
Mr Constance said consumers would win from the proposed plan.
"Ultimately, we are going to see network prices attached to people's bills come down," he said.
The government will seek a mandate for the plan at the NSW election in March.
NSW Opposition Leader John Robertson says privatising part of the electricity network will affect about 83 per cent of NSW residents, roughly 3.8 million homes, as well as the budget.
"Our publicly owned electricity network currently returns profits back to the state budget to help fund our schools and hospitals," Mr Robertson said.
Share
