NSW Labor has a secret weapon to fight off One Nation

If NSW Treasurer Daniel Mookhey had given any thought to a big, brazen pre-election budget splurge next week, the sight of his federal counterparts still trapped in the backlash to their capital gains tax changes would probably have given him more than a moment of pause.

Not that Mookhey – or the Minns government generally – was ever likely to have taken that path. Let me give you a world exclusive: next week’s budget, like the three Mookhey has delivered before it, will not be a barn burner. If Chris Minns, a Bulldogs fan, was ever to follow Lachlan Galvin and get an aphorism tattooed on his bicep, it would say “no surprises”.

On balance, it’s probably a good thing. As much as we might all want a new metro to our doorstep, big new infrastructure spending in the current context of high inflation would carry significant budget risks.

Here’s a comparator, not with the feds, but Victoria. My colleagues at The Age noted after Victoria’s budget in May that their state government expects to be paying $7.85 billion servicing interest on debt over the next year. That’s not totally unexpected, given the amount of debt all Australian states are carrying post-COVID, and the inflation environment. The most recent half-yearly budget update in December forecast NSW would pay slightly more in 2026-27: about $8.1 billion.

However, while forecasts may have changed given recent events (Middle East war, oil shocks, interest rate rises), the two states appear to be trending in different directions.

While Victoria expects to be paying $10.6 billion in interest in 2028-29, NSW was forecasting $9.1 billion, and is paying about half a billion less per year than was projected in the lead-up to the last election. Victoria’s net debt is higher than NSW’s, and we are paying far less as a portion of our gross state product. The government in NSW has also overseen low expense growth compared with the rest of the nation (NSW projects its expenses to grow at about 2.6 per cent per annum between 2024-25, compared with 3.9 per cent federally, for example).

Those are just a few indicators, obviously, and doesn’t make the government perfect.

But winding down infrastructure spending and paying down debt in a high-inflation environment, while not sexy, is responsible. It’s cautious. It’s also how this government plans to win the next election.

Pre-election budgets, traditionally, are about big spending. The Victorian Labor government, unpopular and desperately trying to cling on after 1000 years in power, followed the script, dolling out cash on public transport discounts and car reg