The New South Wales Government has unveiled its 2025–2026 Budget, including significant investments in for the state’s energy and water sectors.
The State Government said reliable, renewable and affordable energy is key to New South Wales’ economic future with increased productivity, higher standards of living and lower emissions.
Energy
The 2025–26 Budget includes continued investment of $2.1 billion over the next four years in the Transmission Acceleration Facility. This will primarily support the five renewable energy zones (REZ) at Central-West Orana, New England, Hunter-Central Coast, Illawarra and South West, and builds on the $1.1 billion invested to date on these critical projects.
The New South Wales Government said this investment completes the financing arrangements of the Central-West Orana REZ transmission project, unlocking $20 billion in private investment into the region by 2030 and supporting more than 5000 construction jobs at its peak.
To support the construction of the Central-West Orana REZ, the State Budget will invest an additional $115.5 million to build a logistics precinct at the Port of Newcastle that will facilitate storage and transportation of critical components.
This critical new hub will provide portside storage for the equipment, including wind turbines and transformers, that is needed to build renewable energy projects across the state.
The New South Wales Government said it is important that the benefits of REZ are realised by local communities, which is why it is continuing the Community and Employment Benefit program. The 2025–26 State Budget allocates $128 million to communities that will host the Central-West Orana REZ, with future funding for the other REZ host communities.
The Budget also includes an additional $579 million from the Federal Government to extend the national Energy Bill Relief payment, providing all households and eligible small businesses with energy bill rebates up to $150 between 1 July and the end of 2025.
Water
The New South Wales Government said it is committed to protecting and restoring the state’s natural environments, and its 2025–26 Budget is delivering this commitment.
To protect the state’s water, the New South Wales Budget will provide:
- $319.1 million for the Sustainable Diversion Limit Adjustment Mechanism Program to improve river health and increase the amount of water returned to the environment
- $75.1 million to protect the health of the state’s rivers
- $3 million to improve water quality at Coogee Beach by upgrading pumps and diverting stormwater flows
- $2.7 million to provide critical local water utilities reforms
- $1.5 million for coastal waterway improvements on the South Coast
- $948,000 for Dams Safety NSW to continue the monitoring and regulation of dams
As part of the state’s $484.9 million investment in First Nations communities, the New South Wales Government has allocated $5.2 million in 2025–26 to finalise the state’s first Aboriginal Water Strategy.
Natural disaster recovery
The State Government said New South Wales has been experiencing a run of the most devastating natural disasters in its history, stating that the State and Federal governments have spent $9.5 billion providing disaster relief and recovery across in the state in the six years since the unprecedented 2019–20 bushfires.
The 2025–26 budget outlines a further $4.2 billion of disaster relief across the forward estimates, a figure that is likely to increase in response to both previous and potentially new natural disasters.
This includes:
Telecommunications
- $33.9 million for telecommunications to strengthen the Public Safety Network to better support Emergency Services Organisations, government agencies, and local councils in delivering critical services that protect communities and infrastructure
Floods
- $358.3 million for disaster recovery and relief measures in response to the May 2025 East Coast floods, including $56.6 million in immediate assistance in 2024–25.
- $27 million for repair and restoration of water and sewer infrastructure in the central west, damaged by 2022 severe weather and flooding
