New South Wales treasurer says Sydney is in ‘uncharted territory’ with a property boom that has helped raise stamp duty revenue to more than $7bn, but rules out a rate cut

The NSW treasurer has said Sydney is in “unchartered territory” when questioned about the housing bubble bursting as the government reaps more than $7bn in stamp duty.

After delivering her first budget since being appointed treasurer, Glady Berejiklian defended not reducing stamp duty despite it contributing a record amount to the budget, saying the government had to be cautious of “volatile” revenue streams.

Asked if that meant the government expected the property bubble in Sydney to burst, Berejiklian responded: “Certainly we’re in unchartered territory, we’ve never had this level of sustained growth and interest rates are very low, we have made assumptions about what we think is happening but we have to be very careful about those assumptions because of the volatility in stamp duty receipts.”

She said the best thing the government could do for housing affordability was “supply, supply, supply” and pointed to the $400m put aside in the budget for the housing acceleration fund.

“We have declining revenues and we need to make sure as a government that we don’t spend more than we receive and what we’ve ensured in this budget is whether it’s in record infrastructure spend or whether it’s in the day-to-day services that matter to people, the people of NSW are getting a return on the hard work we’ve made,” she said at a press conference after delivering her budget speech to parliament.

However, she did remain open to stamp duty changes, saying any discussion on broader tax reform was welcome.

Government revenue is made up of 41% commonwealth funding and 39% taxation, 35% of which is stamp duty, equating to about 10% of revenue. Treasury has forecast growth in stamp duty receipts for the next four years.

The NSW government has delivered a $2.5bn budget surplus for 2015-16, though the bulk of it was made by an accounting change by the government so some transport funding was counted differently.

The underlying surplus is $713m.

Asked if the surplus was due to the accounting change rather than “hard work” as Berejiklian had said, she responded that the Coalition government had inherited a forecast of deficits from Labor.

“We’ve turned that completely around and there’s a number of factors that impact our operating result and we accept and acknowledge how far we’ve worked to get there and we’ve also been very open and frank about what it takes to get to our surplus position,” she said.

“I think the question really addresses the point that yes we have the best budget in Australia, we have the best performing economy in Australia but we can’t take that for granted, there’s no doubt state revenue is volatile on a number of fronts.”