Privatisations have supercharged NSW finances, with Treasurer Dominic Perrottet set to announce an expected surplus of $4.5 billion for 2016-17 when he delivers his first budget today.
The surplus is $500 million higher than forecast in the December half yearly review, which predicted a 2016-17 surplus of $4 billion, thanks to $488.9 million in stamp duty from the partial privatisation of electricity "poles and wires" company Ausgrid.
Since then the 99-year lease of 50.4 per cent of electricity distributor Endeavour Energy and to a lesser extent the 35-year lease of the Land and Property Information service have delivered stamp duty receipts worth more than $700 million.
Mr Perrottet will announce that NSW is on track to become the first state with a net worth of a quarter of a trillion dollars.
He will also say that net debt is the best result since records began in 1996-97 and the lowest in Australia.
"This budget realises the rewards of our poles and wires reforms and invests them back into our local communities with record investments in social infrastructure," Mr Perrottet said.
This meant the government was "delivering exactly what we promised we would".
"Our strong financial and economic management means we can meet the needs of today while building for the future," he said.
On Monday, the government announced the budget will feature an extra $2.2 billion for 123 new and upgraded schools over the next five years to address a surge in enrolments.
It has also pledged $632 million for an upgrade to Campbelltown Hospital, $500 million for an upgrade of Tweed Hospital and $550 million to upgrade Nepean Hospital.
The budget will also contain $244 million for the Art Gallery of NSW's Sydney Modern expansion, $40 billion in planning money for the F6, M9 and M12 motorways and $123 million to revitalise neighbourhoods along Parramatta Road.
The result also comes amid a surge in stamp duty receipts from property transfers in the booming Sydney property market.
With a nod to this, the budget will contain measures to improve housing affordability – an issue Premier Gladys Berejiklian pledged to make a priority upon taking the job in January.
From July 1, first home buyers of existing and new properties costing up to $650,000 will be exempt from paying stamp duty from July 1 – up from $550,000 and adding existing homes to the scheme.
Buyers of first homes worth between $650,000 and $800,000 will receive stamp duty discounts – up from between $550,000 and $650,000 and again reintroducing existing homes to the scheme.
To help fund the changes, the stamp duty surcharge for foreign investors will be doubled to 8 per cent and the land tax surcharge lifted from 0.75 per cent to 2 per cent.
Mr Perrottet will say in his speech to Parliament that the budget is "our growth contract with the people of NSW – that while we will grow bigger, we will also grow better, with the services and infrastructure we need".
But on Monday shadow treasurer Ryan Park predicted that the budget would be "a little bit like the Liberal Party itself: big on promises, very small on reality".
He described the stamp duty reforms as "too little, too late".