The NSW treasurer insists voters can be confident in the state's strong financial position despite a pre-election budget update showing the surplus has taken a hit due to the deteriorating housing market.
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The budget update released on Tuesday has revised down the projected surplus for 2018/19 by 24 per cent to $846 million, primarily due to lower stamp duty and payroll tax revenues.
Treasurer Dominic Perrottet says the public should nevertheless take "immense confidence" in the state's strong financial position with budget surpluses still expected to average $1.3 billion per year over the forward estimates.
"This is a testament to our strong financial management here in this state, day in and day out," Mr Perrottet told AAP.
The budget update reveals there are signs economic momentum is slowing "more than previously expected".
"There are signs that deteriorating conditions in the housing market are having a stronger than expected negative impact on consumer spending and dwelling approvals," it states.
The state's economic growth forecast for the current financial year is down 0.25 percentage points to 2.5 per cent, but labour market conditions remain strong.
"Risks to the outlook appear to have tilted more to the downside since the half-yearly review (in mid-December)," Tuesday's update states.
Mr Perrottet acknowledged the state's economy was seeing a softening but said overall there was very strong economic growth.
"We continue to be the engine room of the nation's economy," he told reporters.
Strong financial management was needed "so when you have those headwinds coming you're well positioned," the treasurer said.
"It's not about the challenges, it's about who's best to manage those challenges going forward."
Australian Associated Press
