A landmark $1.2 billion package unveiled in the NSW budget on Tuesday will substantially boost the number of foster carers, and retain those already carrying the heavy load of providing a home for 14,000 children and young people.

For the first time in 20 years, the foster carer allowance will be increased, jumping 20 per cent through a $143.9 million funding injection.

“Those with love to give a child needing foster care, should have the financial means to do so,” NSW Treasurer Daniel Mookhey said in his budget speech to parliament on Tuesday.

“Budget 2025 makes that more possible.

“NSW can invest more so kids under state care, get safe care.”

The increase in the tax-free allowance will put an additional $176 per fortnight in the pocket of the carer of a typical 14-year-old.

Carers of a five-year-old child will meanwhile see a rise from $656 to $787 per fortnight.

Almost $800 million has been set aside for the out-of-home care system, including investment for reforms to ensure all children and young people can thrive in supportive and stable environments.

Despite a report in May 2024 determining an urgent need to replace it, NSW last-resort alternative care arrangements have continued shuttling dozens of children in care through motels, hotel and caravan parks in the state since then.

The report, titled Moving Cage to Cage, and one of several scathing Advocate for Children and Young People reports documenting how young people and children were shuffled around, detailed first-hand accounts of youth in emergency accommodation after they were removed from their families for safety reasons.

Children described woeful and unsafe conditions in care, as well as feelings of isolation and disconnection.

One of those interviewed by the advocate disclosed being sexually assaulted by a hotel guest when aged 12.

Another described being shuttled through facilities over more than 500 days made them feel like a “dog being moved from cage to cage”.

A third described a conveyer belt of workers as “just random people every day” came in assigned to watch over them.

Children, who drew careful distinction between therapeutic carers and shift workers, spoke of being told to keep their bags packed so they could move at short notice.

Others complained that as well as a disrupted home life, they constantly moved schools or missed class for a myriad of reasons such as distance or poor mental health.

President of the Law Society of NSW, Jennifer Ball, said the record investment to improve the troubled out of home care (OOHC) system will bolster stability for these children and provide a path to their future success.

“We welcome the billion-dollar overhaul of OOHC which, in combination with the extra funding to hire and keep caseworkers, and by increasing the Foster Care Allowance, helps these children to build on their strengths.”

Some 44 new fit-for-purpose homes will be built, at a cost of $49.2 million, to provide stable accommodation for children with complex needs aged 12 and above.

Mookhey lambasted the previous coalition government for relying on the “failed” Permanency Support Program that had more than 100 children a night in emergency accommodation “without the oversight or accountability needed to keep children safe”.

Taxpayer funds will no longer be spent on that outsourced care, with the ad-hoc practice scrapped in April.

With the savings made, a further $191.5 million will be reinvested to get 300 caseworkers in addition to the more than 2000-strong workforce who are also being adequately compensated with higher pay.

The Office of the Children’s Guardian will be given $10 million to continue overseeing the safety of children.

(with AAP)