According to national accounts recently released, the state is forging ahead with state final demand figures surging by 2.4 per cent during the quarter. Demand growth was up 4.7 per cent through the year, the best result in NSW since mid-2010.

The figures also showed private investment in NSW grew 9.3 per cent in the quarter. How the Highlands will fare in the 2014 state budget is yet to be determined but regional NSW is set to receive $1 billion to combat drought, boost tourism and build roads.

Goulburn MP Pru Goward said it was going to be a great budget for regional NSW.

"I am confident the Southern Highlands will receive it's fair share," Ms Goward said.

NSW Deputy Premier Andrew Stoner said the $1 billion investment in regional infrastructure was good news for regional communities.

"We understand the need to proactively invest in regional NSW, whether it is securing water supplies, building new roads or growing local economies by investing in tourism infrastructure," Mr Stoner said.

The $1 billion includes an allocated $110 million for a new tourism infrastructure fund for towns to upgrade airports, develop cruise facilities and build "rail trails". A further $50 million will be used for a new freight productivity program in Western NSW.

This would fund sealing, widening and other upgrades to major truck corridors, so farmers can get their produce "from paddock to plate".

Some $325 million will be allocated to a regional water security fund introduced earlier this year, to build dams and pipelines. One of the biggest infrastructure projects is the Sydney Rapid Transit system for improvements to railways. NSW Premier Mike Baird said the plan was designed to "transform commuting" in Sydney CBD. Transport Minister Gladys Berejiklian said the proposal would address issues and congestion for Sydney commuters.

"We're starting the work to operate parts of our networks, especially the Western line, with increased power supply upgrades and track infrastructure, to make sure we're ready for the additional services that will come once the project starts and is completed," she said.

Cuts to state grants unveiled in the federal budget earlier this year, have shown that NSW needs to find an extra $1.2 billion over four years for the health budget alone, according to the State Treasury. Mr Constance said the federal cuts would be factored into the state budget, but the government would not pursue ''knee-jerk'' fixes such as increasing payroll tax. Other projects making up the rest of the states 2014/15 budget will be revealed in the budget tomorrow, Tuesday, June 17. It will be available on-line from 12.30pm AEST on the website www.budget.nsw.gov.au