Employers and developers have praised pioneering housing initiatives in Australia’s largest state budget while critics rue missed opportunities and few sweeteners for struggling households.

NSW Treasurer Daniel Mookhey charted a cautious course to a possible surplus while unveiling the $128 billion 2025/26 state budget on Tuesday, spruiking increased investment in essential services and lower debt.

“This budget has been put together carefully, deliberately, at a time of great global uncertainty, and sends a big message that NSW is stable and NSW is open for business,” Mr Mookhey said.

Well short of its target of building the 377,000 homes required by 2029 under a national agreement, the state will make an unprecedented intervention through a $1 billion fund guaranteeing pre-sales for developers seeking finance.

The initiative will be aimed at low to mid-rise developments, some of the most challenging to deliver in current conditions and the homes the state needs to tackle housing affordability, Mr Mookhey said.

The state will agree to purchase up to 5000 homes at a discounted rate, hoping banks will then fund the construction of three times that number.

It’s a new step into the mainstream market after Labor’s previous budgets focused on essential workers and social housing.

But it is not the “plan B” promised following a scuppered scheme to build 25,000 homes at Rosehill Racecourse.

Developers championed the guarantee to help get more homes built faster.

“It’s good policy and a great example of government listening and responding to industry,” Urban Development Institute of Australia chief executive Stuart Ayres said.

But renters rued a missing sequel to last year’s $5.1 billion investment in social housing.

“We need to see that amount every year until we reach approximately 10 per cent of housing in NSW being publicly funded,” Tenants Union NSW chief executive Leo Patterson Ross said.

The government was also criticised for missing an opportunity to increase funding for community services battling to meet rising demand.

“If you invest in prevention now … it will lead to better economic productivity, thriving communities in the future,” NSW Council of Social Service chief executive Cara Varian said.

The budget featured the first real increase to foster care allowances in 20 years and a $120 billion infrastructure pipeline focused on hospitals, schools and ageing pipes and poles.

A deficit of $3.4 billion is forecast for the 2025/26 financial year, falling to $1.1 billion in 2026/27.

Modest surpluses of $1.1 billion are projected in the following two years.

The state’s finances were improving but “a lot needs to go right” to reach surplus, the treasurer said.

The opposition attacked the surplus projections as a “work of fiction” and lamented the lack of direct relief for households.

No new rebates were announced while a $60 road toll “cap” has not been extended beyond December 31, despite promises of future toll reform.

More than $2 billion is budgeted for public sector wages over four years, which Labor says will come from filling vacant positions and reduced spending on contractors.

But that failed to account for higher wage demands from psychiatrists, nurses and firefighters, shadow treasurer Damien Tudehope said.

“If the (Industrial Relations Commission) in fact offered more in relation to that wage component, the budget is already further in deficit,” he said.

Gross debt, hitting $178.8 billion by next June, remains proportionally lower than other states outside resource-rich WA.

But the budget papers note uncertainty from unpredictable global policies including US President Donald Trump’s tariffs.

Other drags on the budget include disaster relief, which has leapt tenfold since the 2019/20 Black Summer bushfires, costing $1.6 billion annually.

Workers compensation, which the government has been unable to reform before premiums increase on July 1, is another constraint.

Service station owners have been put on notice not to take advantage of customers due to volatile fuel prices caused by conflict in the Middle East.

Treasurer Jim Chalmers has written to the Australian Competition and Consumer Commission calling for the watchdog to monitor for potential price gouging at the bowser by operators.

Petrol prices have been fluctuating following uncertainty in the Middle East with Iran and Israel trading air strikes and the US bombing Iranian nuclear facilities.

Fears of an escalation in the conflict had prompted concern of fuel facilities being impacted which would see oil prices rise further.

Dr Chalmers said drivers needed to be treated fairly at the fuel pump.

“We don’t want to see service stations do the wrong thing by Australian motorists,” he told reporters in Brisbane on Tuesday.

“We don’t want to see this volatility in global oil prices lead to more than justifiable changes in the price that Australian motorists pay at the bowser.”

Oil prices had been sitting about $62 per barrel at the start of June, before rising to $79 following US strikes on Iran.

While the price has moderated since a ceasefire agreement was reached, economists had warned the cost could rise to above $100 a barrel if fuel supplies were impacted by further strikes.

Consumer watchdog chair Gina Cass-Gottlieb has been asked to report back to the treasurer on price-gouging issues.

“I would expect the ACCC … to investigate any concerns arising about misrepresentations regarding petrol prices, false and misleading conduct or anti-competitive conduct in petrol markets, and to take appropriate action,” Dr Chalmers said in a letter to the commission.

AMP chief economist Shane Oliver said should the price of oil reach above $100 a barrel, it would add 25 cents per litre to retail petrol costs.

He said an increase in petrol costs could push up inflation, which would flow on to other parts of the economy.

“If the oil price went to $100 to $150 a barrel and it’s a much bigger boost to inflation, the Reserve Bank of Australia would be inclined to wait before cutting interest rates again,” he told AAP.

“The price of airfares could go up, as well as plastic prices, which affects a lot of household goods.”

Anthony Albanese has rejected criticism he was slow to respond to US strikes on Iran, while welcoming a ceasefire deal in the Middle East.

The temporary pause in hostilities between Israel and Iran was announced by US President Donald Trump on Tuesday after almost two weeks of conflict.

“What we want to see is the ceasefire announced by President Trump implemented,” Mr Albanese told Sky News on Tuesday.

“We do want to see dialogue and diplomacy replace any escalation and President Trump’s announcement we very much welcome.”

The prime minister has faced criticism from the federal opposition that he was too slow to respond to US military strikes on Iranian nuclear facilities.

Mr Albanese did not make public statements backing the US involvement until more than 24 hours after they took place.

Opposition home affairs spokesman Andrew Hastie labelled the response “flat-footed” and “ambiguous”.

But the prime minister said the government’s position about Iran having access to nuclear weapons had been stated repeatedly.

“What my government does is act in an orderly, coherent way, and we were very clear for some period of time that Iran could not be allowed to have nuclear weapons,” he said.

“We called for Iran to come to the table to ensure that the United States wouldn’t have to take the action that they took.

“We made clear that we supported action that would ensure that Iran couldn’t gain that nuclear weapon.”

Mr Trump posted on his Truth Social platform that a “complete and total ceasefire” had been “fully agreed” by Israel and Iran.

He wrote an initial 24-hour ceasefire period, which would progressively begin after already in-progress attacks finished, would mark “an official end to the 12-day war”.

Mr Albanese used reports of the ceasefire to also call for de-escalation of Israel’s conflict with Hamas in Gaza.

“We also want to see the legitimate aspirations of the Palestinian people fulfilled, and we want to see peace and security in the region. It has been a source of global instability for a long time,” he said.

“We support Israel’s right to defend itself. We haven’t been uncritical of Israel where we believe that the actions have not been consistent.”

US bombers dropped bunker-buster bombs on three Iranian underground nuclear sites on the weekend.

In response, Iran targeted the Al-Udeid US air base in Qatar with “powerful” retaliatory missiles on Monday night, local time.

The attacks forced airspace around Qatar to temporarily close, which impacted flights from Australia.

A Virgin Australia spokesperson said the airline’s scheduled services to Doha, operated by Qatar Airways, were expected to operate later with delays.

“We are working closely with our partner Qatar Airways to support passengers that have been impacted,” they said.

A Qantas spokesman said a Perth to London flight had been diverted to Singapore, while a Perth to Paris service was returning to Western Australia.

“We continue to monitor airspace availability closely and will alter our schedule as required,” he said.

Opposition Leader Sussan Ley said a ceasefire was a “vital step” for preventing further suffering, while condemning Iran for its strike.

The government is still trying to evacuate about 3000 Australians registered for assistance to depart Iran and more than 1000 in Israel.

Virgin Australia has returned to the stock market with a transaction that timed its arrival perfectly.

Shares in the nation’s second-biggest airline were changing hands at $3.165 on Tuesday afternoon, up 9.1 per cent from their $2.90 listing price.

Virgin shares began trading under the ticker code VGN at noon, hours after word of a likely ceasefire between Iran and Israel sent oil prices tumbling.

“Until yesterday there were concerns the airline’s IPO was hitting the market at the wrong time, but the overnight action has changed everything,” Moomoo market strategist Michael McCarthy said.

“Now, with risk appetites rising and oil prices dropping as fears of war recede, Virgin might be the luckiest debutant of the year.”

Jet fuel typically is the biggest operational expense for any airline, typically representing around 30 per cent of all costs, according to the International Air Transport Association.

As with petrol, the price of the refined fuel is closely linked to the price of crude oil, which fell sharply at a possible end to the Middle East hostilities.

Virgin’s pre-existing owners – including US investors Bain Capital, Qatar Airways Group, Virgin Group and the Queensland Investment Corporation – sold a 30.2 per cent stake in the airline for $685 million, giving it a market capitalisation of $2.3 billion based on the offer price.

Its chief rival, Qantas, was valued at more than $15 billion on Tuesday.

Virgin collapsed into voluntary administration at the start of the COVID-19 pandemic in April 2020, owing $7 billion to more than 12,000 creditors.

It was acquired by Bain in November of that year for $700 million before being delisted from the stock market and restructured.

“Today marks the start of an exciting new chapter for Virgin Australia as a publicly listed company,” Virgin Australia chairman Peter Warne said.

“Our listing reflects the remarkable work undertaken over the past five years to transform the airline and position it for long-term success.

“It is great news not just for our people, but for travellers who rely on Virgin Australia being a strong, resilient and competitive airline.”

Virgin Australia chief executive Dave Emerson said the airline was entering its next phase with a clear strategy, simplified operating and commercial models and strong team.

Staff were being offered $3,000 “take-off grants” that would convert to ordinary shares if they remained with the company during a 24-month vesting period in recognition of their contributions to the airline’s success, he said.

Virgin flies a fleet of more than 100 aircraft on 76 domestic and short-haul international routes.

Earlier in June, it began long-haul services between Australia and Doha under a “wet lease” agreement with Qatar Airways.

Under such deals, the lessee provides the plane and crew, while the lessor sells the tickets and markets the flights.

Charting a path back to surplus, the treasurer compiling Australia’s largest state budget has advised caution amid global uncertainty as he trumpets stability.

NSW Treasurer Daniel Mookhey unveiled the $128 billion 2025/26 state budget on Tuesday focused on housing, essential workers and protecting vulnerable communities.

“Investment in our essential services is up, debt is down, and NSW is back on the path toward surplus,” Mr Mookhey told reporters in the budget lock-up.

“This budget has been put together carefully, deliberately, at a time of great global uncertainty, and sends a big message that NSW is stable and NSW is open for business.”

Finance Minister Courtney Houssos said the budget is about reform and accelerating growth.

“Our focus over three budgets has been on controlling what we can in the context of the budget.

“That has resulted in very low expenses growth … at the same time as we are delivering these important reforms,” she said.

Remaining below target to build 377,000 new homes by 2029 as part of a national housing agreement, the state will make an unprecedented intervention in the housing market.

A $1 billion revolving fund will provide pre-sale guarantees as developers seek financing to begin construction.

The funds will go towards low-to-mid-rise developments, some of the most challenging projects to deliver under current market conditions and the kind of homes the state needs to tackle housing affordability constraints, Mr Mookhey said.

The government will guarantee 5000 homes in the hope of supporting the construction of 15,000 more.

It is a step to broaden its response to the housing crisis, moving into the mainstream market after previous budgets focused on supporting priced-out frontline essential workers and building more social housing.

“We are very careful about what projects we are going to guarantee,” Mr Mookhey told reporters.

But it is not the “plan B” promised following the failure of a plan to build 25,000 homes at Rosehill Racecourse.

A record $1.2 billion child protection package will meanwhile increase support and protection for young people in the state’s care.

Allowances for foster carers will increase for the first time in decades.

Almost $50 million will go to building or upgrading residential care homes for children with complex needs, and $191.5 million will support caseworker recruitment and retention.

Mr Mookhey said the package was funded “from the savings created by no longer having to pay labour hire firms to care for kids in motels”.

A deficit of $3.4 billion is forecast for the 2025/26 financial year, falling to $1.1 billion in 2026/27.

Modest surpluses of $1.1 billion are projected in the following two years.

Mr Mookhey acknowledged “a lot needs to go right” in order to return to surplus but the state’s finances were improving.

Net debt is $120 billion while gross debt, hitting $178.8 billion by next June, remains proportionally lower than other states outside resource-rich Western Australia.

But the budget papers note increasing uncertainty from unpredictable global policy including US President Donald Trump’s tariff regime.

Other drags on the budget include workers compensation, which the government has been unable to reform before premiums increase on July 1, and natural disasters.

Disaster relief spending has leapt tenfold since the 2019/20 Black Summer Bushfires, when compared to the six years prior, now costing $1.6 billion annually.

WikiLeaks founder Julian Assange is marking the first anniversary of his release from prison in the UK.

His wife Stella said he is working on a project to slow the “rush” towards war. 

In the early hours of June 24 last year, Assange was transported under custody in a high-security convoy from Belmarsh maximum security prison to Stansted Airport. 

He had been imprisoned in Belmarsh for more than five years and was detained in the UK for 14 years. 

He flew on an Australian government jet under formal custody to US federal court in the tiny US overseas territory of Saipan in the Pacific Ocean, refuelling in Bangkok. 

On June 26, a plea hearing in Saipan formally secured his release, conditional on him immediately leaving the territory. 

Later that day he landed in Canberra where he was reunited with his family. 

On the anniversary, Stella Assange said: “We were in Europe for the opening of The Six Billion Dollar Man at Cannes, Pope Francis’ funeral, and to try to understand where things are heading – politically and technologically. 

“Julian has been working on something for several months now, and I hope it can help slow the rush toward war. 

“Three hundred and sixty-five days have passed, but we are light years away from Belmarsh prison. 

“To all the supporters who helped make this possible, there are no words to express how grateful we are to have Julian free.”

Anthony Albanese has welcomed Donald Trump’s announcement of a ceasefire between Israel and Iran, while remaining “deeply concerned” about the welfare of Australians in the Middle East.

The prime minister on Tuesday responded to revelations from the US president that a ceasefire was due to take place within six hours following 12 days of conflict.

“We have consistently called for dialogue, diplomacy and de-escalation,” Mr Albanese said.

“The safety of Australians in the region is our priority.

“We continue to closely monitor the situation in the Middle East and are deeply concerned about keeping Australians safe.”

Mr Trump posted on his Truth Social platform a “complete and total ceasefire” had been “fully agreed” by Israel and Iran.

An initial 24-hour ceasefire period, which would progressively begin after any already in-progress attacks finished, would mark “an official end to the 12-day war”, he said.

US bombers dropped bunker-buster bombs on Iranian underground nuclear sites over the previous weekend, joining Israel’s conflict against Iran.

In response, Iran targeted the Al-Udeid US air base in Qatar with “powerful” retaliatory missiles on Monday night, local time.

Qatar’s government said it had successfully intercepted the missile attack and no deaths or injuries were recorded.

Iran reportedly provided prior notice of the strike, significantly reducing the chance of casualties.

Foreign Minister Penny Wong earlier condemned Iran’s attack.

“We do not want to see further escalation,” she wrote on social media site X.

“A full-scale war in the Middle East would be devastating for the people of the region and the world.”

US military officials said none of its bases in Iraq were targeted but that a malfunctioning Iranian missile aimed at Israel triggered an alert in Iraq earlier in the day.

Senator Wong urged Australians travelling abroad to register with Smartraveller, and pointed to cancellations of flights and airspace closures.

A Virgin Australia spokesperson said two flights operated by Qatar Airways for the airline had been diverted on the way to Doha following the temporary closure of airspace, and had landed safely.

“Guest recovery is being coordinated by Qatar Airways, including support on the ground and assistance with onward travel arrangements,” the airline said.

“The safety and wellbeing of our people and customers is our number one priority.

“Guests scheduled to travel on Virgin Australia services between Australia and Doha in the coming days are advised to closely monitor their flight information.”

Mr Albanese on Monday backed the US intervention in the conflict between Iran and Israel after Washington ordered the bombing of three Iranian underground nuclear sites in the country’s west.

Cabinet minister Mark Butler said the government was still trying to evacuate about 3000 Australians registered for assistance to depart Iran and more than 1000 in Israel.

“We’ve been trying to do all that we can, particularly in land crossings,” he told Nine’s Today show on Tuesday.

“But our foreign affairs staff are working day and night to explore every possible opportunity to help Australians get out of there.”

Australia has condemned Iran’s missile strike on a US base in Qatar and warned of the “devastating” global consequences if the countries escalate.

Iran retaliated after US bombers dropped bunker-busters on Iranian underground nuclear sites at the weekend, joining Israel’s air war against Iran.

Iran targeted the Al-Udeid US air base in Qatar with “powerful” missiles on Monday night, local time.

Qatar’s government said it had successfully intercepted the missile attack and no deaths or injuries were reported.

In response, Foreign Minister Penny Wong condemned Iran’s attack.

“We do not want to see further escalation,” she wrote on social media site X on Tuesday.

“A full-scale war in the Middle East would be devastating for the people of the region and the world.

“Australia continues to call for de-escalation, dialogue and diplomacy.”

US military officials said no US bases in Iraq were targeted but that a malfunctioning Iranian missile aimed at Israel triggered an alert in Iraq earlier in the day.

Senator Wong urged Australians travelling abroad to register with Smartraveller, and pointed to cancellations of flights and airspace closures.

Prime Minister Anthony Albanese on Monday backed the US intervention in the conflict between Iran and Israel, after Washington ordered the bombing of three Iranian underground nuclear sites in the country’s west.

Mr Albanese said Iran should not have access to nuclear weapons, while reaffirming the need for diplomacy and restraint.

Cabinet minister Mark Butler said the government was still trying to evacuate about 3000 Australians registered for assistance to depart Iran, and more than 1000 in Israel.

“We’ve been trying to do all that we can, particularly in land crossings,” he told Nine’s Today show on Tuesday.

“We had a flight we thought might be able to leave Israel yesterday, but because of the security situation, that wasn’t able to happen again.

“But our foreign affairs staff are working day and night to explore every possible opportunity to help Australians get out of there.”

US President Donald Trump said Iran’s attack was unsuccessful, with no Americans harmed and “hardly any damage done”.

“Most importantly, they’ve gotten it all out of their ‘system,’ and there will, hopefully, be no further HATE,” Mr Trump said in a post on Truth Social.

Mr Trump also thanked Iran for giving the US notice prior to shooting missiles at the military base.

“Perhaps Iran can now proceed to Peace and Harmony in the Region, and I will enthusiastically encourage Israel to do the same,” he said.

A cost-of-living cash splash is set to be reeled in as a state government looks at long-term budget repair before hosting an Olympics.

Queensland’s Liberal National government is vowing to hand down a “responsible” budget on Tuesday after winning the 2024 election, ending Labor’s nine-year reign.

Treasurer David Janetzki is looking to chip away at Queensland’s projected total debt of almost $220 billion ahead of the 2032 Brisbane Games.

“It will lay the foundations for a fresh start and it will be delivering for Queensland,” he said.

The first LNP budget since 2014, when Campbell Newman was in power, is set to look very different from the former Labor government’s 2024 budget, which featured a significant cost-of-living cash splash.

Queenslanders were treated to $1000 energy rebates and a 20 per cent reduction in car registration costs, along with frozen government fees.

Labor initially said total debt would blow out to $172 billion by 2027/28, including projected deficits for two financial years before returning to surplus in 2026/27.

However, in Mr Janetzki’s mid-year budget update in January, debt expectations rose to exceed $217 billion by 2027/28.

It led to S&P Global revising its outlook for Queensland from stable to negative but maintaining its AA+ rating.

If the rating is downgraded, it increases the cost of borrowing, making it harder for the government to fund services.

Queensland’s revenue has also been hit hard by a $2.4 billion reduction of GST revenue in 2025/26 and falling coal royalties.

Neither Mr Janetzki nor Premier David Crisafulli would be swayed on whether the debt figure would change in Tuesday’s budget, despite a pre-election promise the red line would improve under the LNP.

Mr Crisafulli would not confirm if there would be a return to surplus in the government’s first term.

The premier ruled out any cuts to the public service, promising it would be properly resourced.

The government wants to deliver structural support to services in four key areas – health, housing, crime and cost of living.

It has already announced almost $150 million to better equip the police force with tasers, tyre deflation devices and body-worn cameras.

Families with kids aged five to 17 can claim a $200 voucher to help with sports expenses, costing the government $62.5 million a year for four years.

“It will deliver targeted, responsible cost-of-living support for those who need it most,” Mr Janetzki said of the budget.

Iran’s potential retaliation to US military strikes could lead to a surge in the price of fuel and higher inflation in Australia, economists say.

Motorists have already seen a slight rise in the cost of fuel after the US launched strikes against three Iranian nuclear facilities.

While Australian consumers have been told not to panic about the Middle Eastern unrest, escalating conflict in the region could lead to further price hikes, AMP chief economist Shane Oliver says.

“The real risk would be if intervention by the US sets off retaliation by Iran that disrupts oil supplies,” he told AAP.

“If Iran do successfully block the Strait of Hormuz, then you’ll end up with a bigger spike in oil prices and petrol and that will have a severe economic impact.”

Mr Oliver said petrol would rise by 25 cents per litre in the likely event oil prices skyrocketed to more than $100 a barrel.

He said an increase in petrol costs could push up inflation, which would flow on to other parts of the economy.

“If the oil price went to $100 to $150 a barrel and it’s a much bigger boost to inflation, the Reserve Bank of Australia would be inclined to wait before cutting interest rates again,” he said.

“The price of airfares could go up, as well as plastic prices, which affects a lot of household goods.”

Australian Travel Industry Association chief executive Dean Long said airfares were not likely to increase immediately following the escalation in conflict in the Middle East.

However, he said travellers heading through the Middle East on the way to Europe would likely face longer journeys.

“The increase in congestion is causing delays,” he told AAP.

“With the narrowest flight path in recent memory – with Russia, Ukraine, Iran and Israel closed – the airspace is very narrow to get to Europe.

“Beforehand, there were multiple ways to catch up delays and stay on times, but in reality, there is a very narrow window to catch up delays, and there is less room for error by the airlines.”

Mr Long said there had not been any major disruptions for Australian travellers so far and urged passengers not to cancel their flights.

Prime Minister Anthony Albanese has backed America’s intervention in the conflict between Iran and Israel.

While Iran should not have access to nuclear weapons, Mr Albanese said a de-escalation was needed.