The NSW mini-budget will be handed down on Tuesday with a deficit of about $1 billion, the largest in more than 15 years.

Many budget cuts have already been made public, affecting everyone from school children to property investors and motorists.

At the centre of the cuts is the indefinite shelving of the $12 billion North West Metro rail link.

NSW Lotteries and waste-management services are also expected to be sold-off and the $60 million back-to-school allowance scrapped.

The school transport subsidy scheme is to be overhauled and the government will impose a 12-month public service jobs freeze on top of cuts to 171 senior positions.

Premier Nathan Rees said the mini-budget was not a short term measure but was about setting the state up for the next two to 10 years.

He denied the economy was heading for recession, despite being on the verge of recording its first deficit since 1997 and the largest since 1992.

“The Australian economy and the NSW (economy) in particular, in the face of what’s going on elsewhere, are actually doing okay,” he said yesterday.

Treasurer Eric Roozendaal told The Weekend Australian he would unveil a deficit of between $900 million and $1 billion, far from the $268 million surplus projected in the June budget.

The mini-budget will also contain a $150 million order for 300 new buses to service the north-west and other demand areas in Sydney, and an extra $150 million a year will be set aside for 500 new maintenance projects at the state’s schools.

It has also been revealed NSW drivers’ greenslips will be increased by $10, to raise up to $100 million in revenue, while land taxes for investors will be hiked.

The need for a mini-budget was announced after former premier Morris Iemma failed in his attempt to sell off the state’s electricity industry.