The NSW government will push for more control over Commonwealth funding after revealing a shrinking surplus on the back of the largest drop in expected revenue in the state's history.
The expected surplus for 2018/19 will be $802 million - down from the $846 million predicted in a March pre-election budget update and well under the $1.4 billion forecast last year.
And while the state is expected to have $8.8 billion in the bank by the end of this financial year, by 2022/23 net debt is projected to grow to $38.6 billion.
But the coalition plans to continue delivering surpluses over the next four years - including $1 billion in 2019/20 - as it funds a raft of election promises and splashes a record $93 billion on infrastructure.
Treasurer Dominic Perrottet on Tuesday said the state was "strongly in the black, back to back" despite the revenue write-downs.
"We sit here today, on the back of funding every one of our election commitments, strongly in surplus," he told reporters as he delivered his third budget.
The property slump has contributed to the fall in expected revenue, with stamp duty down a further $232 million over the four years to 2021/22.
It follows a reduction of more than $10 billion in stamp duty revenue since the 2017/18 budget and the impact has been compounded by a cut earlier this year to the state's expected GST revenue.
There were few surprises in the budget with the most notable items revealed before it was handed down, including 8300 extra health staff, 4600 more teachers, 1500 more police and $355 million for drought relief.
Sydney's metro rail project will be fast-tracked in the city's west and $55.6 billion has been allocated to road and rail infrastructure across the state over the next four years.
The treasurer had already flagged savings would be achieved through cuts to the public service back-office, confirming on Tuesday about 2000 to 3000 positions would go.
Mr Perrottet also announced a new review of federal financial relations - which, he told parliament, were "a mess".
He said NSW contributed the most in GST and income tax "yet have to sit and watch as it's doled out to other states".
"We rely on the Commonwealth for a substantial part of our funding - but have little control over where it is spent," the treasurer said.
He told reporters he'd spoken with his federal counterpart Josh Frydenberg about the review, which was not the first but would provide "a much-needed state perspective".
The budget attracted criticism from Labor, with NSW interim leader Penny Sharpe saying it failed to address "so many of the burning issues that actually impact on real people", including climate change, homelessness and domestic violence.
Opposition treasury spokesman Ryan Park said the government had failed and couldn't manage the budget despite record levels of income and after sell-offs worth billions.