NSW budget heads for $1b deficit

Updated September 05, 2011 20:09:01

New South Wales Government sources have confirmed the Coalition's first budget tomorrow will plunge the state's finances into the red.

The sources have confirmed the budget will be around $1 billion in deficit this financial year, before returning to surplus for the rest of the forward estimates.

That contradicts Treasurer Mike Baird's statements shortly before the Coalition won the March state election.

The then opposition spokesman said their policies would have no impact on the budget surplus over four years.

Shadow treasurer Michael Daley says a deficit will confirm poor economic management.

"(Premier) Barry O'Farrell was left a budget in surplus and what he's doing is sacking thousands of workers, slashing programs and he still can't keep the budget in the black," Mr Daley said.

"Barry O'Farrell keeps talking about a budget black hole. There wasn't a budget black hole, but there is now. It's a black hole of debt that Barry O'Farrell's building in NSW."

Mr Baird is making no apologies for the numbers he will hand down tomorrow.

"We are facing very tough circumstances, whether it be the global economic events or some of the challenges left behind by state Labor. We are facing a very difficult budget," he said.

"We make no illusions that this is going to be tough and the numbers will be revealed tomorrow."

Mr Baird would confirm there will be new spending on health and transport.

"We are excited that we are able to offer the community some hope that infrastructure that has been left unbuilt, spoken about but never delivered for the past 16 years," he said.

"Tomorrow is the start of a new process where things start to get done rather than spoken about."

The Premier confirmed on Fairfax Radio this morning that Sydney's North West Rail Link would be among the projects to benefit.

"We're putting $314 million aside over the next 12 months for the North West Rail Link. It's a project that over four years will have $2.5 billion set aside for," Mr O'Farrell said.

"It's a project that would be assisted if the Federal Government backed the state project that is number one in terms of our state transport projects."