In its 2017-2018 budget, published this week, the state government said it will allocate A$7.2bn ($5.5bn) to the third stage of WestConnex, Australia’s largest transport infrastructure project, A$4.9bn ($3.7bn) to Sydney Metro City and South West, A$4bn ($3bn) to Sydney Metro Northwest and A$3.5bn ($2.7bn) to upgrades to the Pacific Highway.
The state government will also make significant investments in local roads, including A$648 million ($492 million) in NSW and Commonwealth government-funded road upgrades for the new Western Sydney airport at Badgerys Creek.
An additional A$2.8bn ($2.1bn) will be spent over four years on new and upgraded hospitals, bringing the total investment on health infrastructure to a record $7.7bn ($5.8bn) over four years, the NSW government said. The funding will be used to build new hospitals in Mudgee and Macksville, and for major hospital redevelopments.
The NSW government has also committed A$4.2bn ($3.2bn) over four years for capital works across NSW schools.
"The NSW government's substantial infrastructure investment is primarily due to the success of its asset recycling strategy and a move into the construction phase for certain major projects including WestConnex and Sydney Metro City & Southwest Projects," said Sydney-based infrastructure expert Max Ababio of Pinsent Masons, the law firm behind Out-Law.com.
"The successful asset recycling strategy has provided substantial funds, mainly from higher transfer duty receipts and the asset recycling initiative payments, needed to deliver the state's infrastructure programme," Ababio said.
"The federal asset recycling initiative provides incentive payments to states and territories that privatise state-owned assets and invest the proceeds into new infrastructure projects. The NSW government has been pushing ahead with that, so that it now has a substantial amount of surplus that it can invest in infrastructure," he said.
The NSW government has completed the long-term partial lease of its electricity network businesses Endeavour Energy and Ausgrid, and has successfully granted a concession of the Land and Property Information’s title and registry services which provided net proceeds of A$2.6bn ($2bn), Ababio said.
"The successful completion of those transactions means that the NSW Government can now secure the final tranche of asset recycling initiative payments totalling A$2.2bn ($1.7bn).
NSW is expected to record a surplus of A$4.5bn ($3.4bn) in 2016-17, with a surplus of A$2.7bn ($2bn) forecast for 2017-18 and average surpluses of A$2bn ($1.52bn) forecast over the four years to 2020-21, the NSW government said.