By Ryan Park MP, Shadow Treasurer
The NSW Coalition Government has sold off billions of dollars of public assets and are creating huge structural problems for the NSW budget.
To date, the NSW Coalition Government have privatised over $50 billion of public assets including the LPI Land Titles Registry, electricity assets, ports and much more.
This is an act of economic vandalism – they have taken their privatisation agenda too far and have sold off far too many income generating assets. The LPI Land Titles Registry generated $190 million in revenues and $130 million in profits in one year.
While these privatisations create short term sugar hits for the budget, in the longer run this creates structural problems for the NSW economy as constant revenue streams are lost.
Premier Berejiklian and Treasurer Perrottet have been caught up in their own spin and have ignored the long term consequences of their decisions.
The consistent line they’ve managed to persuade anyone not paying full attention is that NSW is a roaring economic success because it has ‘zero debt’. This is far from the truth as they have plenty of borrowings and debt:
- They have budgeted interest expenses of $2.1 billion on borrowings of $32.6 billion in 2017-18 according to their Budget Papers
- The Budget forecasts net debt to rise to $18.6 billion by 2020-21 (or 2.7 per cent of GSP)
- Total borrowings for 2020-21 are to reach over $45 billion. Interest expenses are expected to hit $2.6 billion in 2020-21
Significantly, the Australian Bureau of Statistics exposed NSW as the highest-taxing State per capita for the first time in 10 years – an issue that affects every business and individual.
At the same time wages growth has plummeted to record lows in NSW at 2.1 per cent – well down from when the Liberals assumed office in 2011 when it was 3.9 per cent (ABS).
Just to top it off and proving that people and businesses do vote with their feet; net interstate migration from NSW was negative 12,822 in the 12 months leading up to December 2016 i.e. there were more people leaving NSW for other states than entering. Victoria during the same time period had people flocking to the state with a positive net migration rate of 17,185 people.
The Premier and her Treasurer do no better with infrastructure and now preside over $10 billion in infrastructure budget blowouts, which has forced them into a state of continual bluster to conceal serious financial mismanagement across a number of key projects.
So the reality that business and investors now have to face is medium to long term structural issues created by the Liberals within the NSW Budget.
They’ve had the benefit of hiding what amounts to prolonged economic mismanagement because of record stamp duty revenue which hit over $11.4 billion in 2016-17 (more than doubled since 2011-12). They have failed to implement any meaningful tax reform to improve the structure of the NSW tax system.
A Foley Labor Government will manage the NSW economy by thoroughly examining expenditure and imposing fiscal discipline. We will not only consider the short term but also longer term implications on the NSW economy. Our focus will be on improving project management and reducing waste, in contrast to the high-taxing, high-tolling, public asset-selling regime which the Liberals, uniquely, seem to think benefits this State.
Ryan Park MP is the NSW Shadow Treasurer