NSW government agencies will be hit with a further $1.4 billion in cuts in next week's state budget, with Treasurer Gladys Berejiklian set to announce continuation of an annual 1.5 per cent "efficiency dividend".
The cuts will run across the budget forward estimates to 2019-20, but spending associated with schools, emergency services, health frontline services and police front-line services is exempt.
The standing budget cut, which the government describes as "modest" and targeting back-office operations, has been imposed by the Coalition since it won government in 2011.
It comes despite Ms Berejiklian last year boasting that NSW had the strongest budget in the country, with a string of surpluses forecast across the forward estimates, driven largely by the residential property boom.
The Treasurer says continuation of the cuts is necessary due to the combination of falling state revenue and a "dramatic" drop in GST receipts from the Commonwealth.
"We are the victims of our own success when it comes to the GST," Ms Berejiklian said.
"Good governments keep a tight rein on the back office so that more can be invested on the front line – it is the only way to ensure growing investment in infrastructure and services whilst maintaining fiscal discipline."
Ms Berejiklian said the government has "a strong record of growing investment in key service areas and these back-office efficiencies will allow this to continue".
"In the digital age, governments must be more efficient and less bureaucratic in how they manage themselves – this drives better-quality customer service," she said.
