NSW Labor pledges 15% debt ceiling to contrast with federal borrowing

Ahead of the upcoming state election, NSW Labor is emphasizing fiscal prudence by unveiling a net-debt limit of 15% of gross state product, a figure that would keep the state among the lowest-debt jurisdictions in Australia. Treasurer Daniel Mookhey argued the target can be achieved without privatizing assets or imposing wage caps, unlike measures taken by the previous coalition government. He also committed to reducing the state's debt by at least $10 billion and to amending the Fiscal Responsibility Act to reflect the impact of soaring house prices and a 4.6% cash rate.

The proposal contrasts with the federal Labor government’s 18.8% debt-to-GDP ratio, which is projected to rise toward 22% in coming years. NSW currently holds a AAA rating from Fitch and Moody’s and an AA+ rating from S&P, with net debt at 13% of the economy. The plan is presented as a safeguard for families facing higher mortgage costs as interest rates climb.