The AADA has reviewed the 2026-27 NSW State Budget from the perspective of the franchised new car retail sector.
This bulletin refers to some of the key measures that may be relevant to New South Wales (NSW) motor vehicle dealers, including vehicle taxation and registration settings, government investment, road infrastructure funding, and broader economic and fiscal trends that may influence consumer confidence and vehicle demand across NSW.
What the NSW Treasurer Said
The NSW Treasurer, The Hon Daniel Mookhey MLC has advised that this Budget is about building a state working Australians can afford and that the budget aims to ‘attack the cost of living from every angle.’ The Treasurer also commented that the budget reflected the immediate aftermath of the May Federal Budget.
The budget announces a $2.3 billion deficit in 2026-27. This is more than was predicted at the NSW Government half yearly update. The budget does however predict a return to surplus of $1.1 billion in 2027-28, a surplus of $1.76 billion in 2028-29 and $1.88 billion in 2029-30. This will be achieved despite a reduction in stamp duty and land taxes of more than $8 billion.
By June 2026, NSW gross debt will be $178.5 billion, $4.9 billion lower than forecast in 2023.
Key Outcomes from the NSW Budget
- A $10.3 billion increase to health services.
- Households to be eligible to apply for funding from a new $557.1 million fund to access energy saving technologies, including $480 million in interest free loans.
- Regional NSW does not get to enjoy the full benefit of some cost-of-living expenses addressed in the budget such as the lowering of the weekly toll cap.
- However, the Government will spend $2.3 billion over 4 years for new schools in the Illawarra and the Hunter.
- An investment of $6.5 billion over 10 years to deliver thousands of electric buses.
- There is no rise on the rates of motor vehicle duty for 2026-27.
Motor Vehicle Related Information
1. In the 2026-27 Budget Paper No.01-Budget Statement the following has been announced:
- A $561 million transport affordability package to help ease travel costs. This will include cutting $100 off private vehicle registration and $80 off private motorcycle registration. This will cost the NSW taxpayer $435 million. Added to this is a temporary reduction to the weekly toll cap to $50 (from $60) for 2026-27.
- Motor vehicle taxes have been revised down by $280.2 million over the four years to 2029-30 from the time of the 2025-26 Half-Yearly Review.
- Based on current electric vehicle uptake rates, the Electric Vehicle Road User Charge is expected to commence on 1 July 2027, per the Electric Vehicles (Revenue Arrangements) Act 2021. Future revenue may be affected by developments in national road user charging reform.
- Motor vehicle registration duty has been downgraded by $50.0 million in 2025-26 and $282.0 million over the four years to 2029-30 compared to the 2025-26 Half-Yearly Review.
- Higher interest rates and a sharp increase in petrol prices have contributed to a decline in vehicle registrations that is expected to continue as ongoing cost-of-living pressures weigh on new vehicle demand.
2. In Budget Paper No.02 Performance and Wellbeing Statement the following has been announced:
- That the rate of motor vehicle theft has has reduced by 59.5 percent in the period 2005-2025.
3. In Budget Paper No.03 Infrastructure Statement the following has been announced:
- The delivery of the toll-free M12 Motorway, connecting the Western Sydney airport to the Aerotropolis.
- $45.0 million for upgrading M1 Pacific Motorway Upgrade between Wahroonga and Beresfield.
- The NSW and Australian Governments are funding the 15-kilometre M1 Pacific Motorway extension to Raymond Terrace project with a commitment of $1.9 billion.
Other
NSW members are encouraged to provide their feedback to Michael McKenna with concerns and policy reform measures about the Budget and to provide feedback for areas of concern to be included in the AADA 2027-28 NSW Budget Manifest.