Former NSW treasurer Matt Kean’s $27b policies puts the breaks on Labor

Big-spending former treasurer Matt Kean dolled out $27 billion in “new policy measures” in the nine months before the election, which are now costing taxpayers $25 million a day.

Big-spending former NSW Treasurer Matt Kean dolled out $27 billion in “new policy measures” in the nine months before the election, which are now costing taxpayers $25 million a day.

The new Labor Minns government now claims the staggering cash splash - revealed in Treasury advice obtained by The Daily Telegraph - makes Mr Kean the biggest spending treasurer in 40 years whose largesse has forced it into a cycle of savage budget cuts.

The secret Treasury advice shows government spending has only reduced by 1.3 per cent since the height of Covid, when the Coalition was throwing money out the door to keep the economy afloat.

Despite Covid relief measures and disaster recovery payments tapering off, expenditure is still above $110 billion per year, as projected by a budget update before the election.

As Treasurer, Mr Kean committed $27.7 billion to “new policy measures” in his budget last year, and in the months before the election.

Former Treasurer Matt Kean dolled out $27 billion in “new policy measures”. Picture: NCA NewsWire / David Swift

The money baked into the budget will be spent over the next three years.

The spending means taxpayers are forking out $25 million more per day until June 2026 thanks to the Coalition’s extra spending.

Now, in a bid to make the case for spending restraint in next month’s state budget, the Labor government has claimed that Mr Kean splashed so much cash during his tenure that he became the biggest spending Treasurer from any state government in the past 40 years.

The $27.7 billion in new spending includes major capital expenditure like Metro projects and rural healthcare infrastructure.

Treasurer Daniel Mookhey says he would have had more firepower. Picture: Jeremy Piper

It also includes $770 million over three years to implement Mr Kean’s signature childcare future fund, legislated with the support of Labor.

Mr Kean’s big-spending 2022 budget outlined billions of dollars in spending to support a universal pre-kindergarten program, to give children an extra year of education before starting school.

The pre-K policy was championed by former Premier Dominic Perrottet, who also devised the government’s stamp duty reforms and a $743 million boost to palliative care.

Mr Kean’s childcare fund will cost almost $5 billion over ten years.

At the time, Mr Kean said the fund would create long-term certainty for the childcare sector and “create new places in childcare deserts.

However, critics of the fund have suggested that it may discourage the Commonwealth from spending more cash on childcare in NSW.

The extent of how much money the former government spent before the election can be revealed as Premier Chris Minns and Treasurer Daniel Mookhey prepare to hand down Labor’s first budget in September.

Dominic Perrottet. Picture: Justin Lloyd

“We’d have more fiscal firepower to rebuild the State’s essential services if the previous government had refrained from trying to buy its way to re-election using the public’s money,” Mr Mookhey said.

“Repairing our essential services, rebuilding disaster stricken communities and helping families through this cost of living crisis means making better choices about how we use the public’s dollars.”

Mr Kean defended the money he spent as Treasurer, saying it was part of the then-Premier’s “ambitious election commitment agenda”.

“The premier’s ambitious election commitment agenda would have taken the state forward by raising the Warragamba Dam wall to make families safe, provided financial security for kids through the future fund, spent billions on regional rail and roads, and delivered cheaper power bills through energy bill relief.”

He said a budget update before the election “confirmed a third year return to surplus and a protected Triple A rating”.

“Minns and Mookhey have cut all of the Premier’s initiatives but are still expected to lose the coveted triple A – and blow the budget,” he said.

REBATES WORK TO INCREASE EV COSTS

Former Treasurer and Minister for Energy Matt Kean plugging in his electric vehicle at the Park&Ride car park in Narrabeen. Picture: Jonathan Ng

Electric vehicle tax breaks and rebates announced by former Energy and Environment Minister Matt Kean have failed to encourage EV take up and are only working to push up prices.

The Daily Telegraph can also reveal that the tax breaks – which will cost the budget more than $3 billion over ten years – have so-far overwhelmingly benefited voters in Liberal held electorates.

The Minns government is now considering scrapping the electric vehicle initiatives as part of its slash and burn government next month.

The former government’s Electric Vehicle Strategy unveiled in June 2021 by Mr Kean, then Transport Minister Andrew Constance, and then Treasurer Dominic Perrottet, gave $3,000 cash rebates for up to 25,000 new EVs.

It also scrapped stamp duty on all new and used EVs costing less than $78,000.

The cost of the stamp duty exemptions are forecast to grow significantly over the decade as more people switch to electric cars, to a total of $3.3 billion.

To May 31, 16,433 stamp duty exemptions had been granted.

As of June 30, 7,505 cash rebates had been granted, costing $22.5 million.

But according to Treasury advice provided to government, the tax breaks and rebates have only led to higher prices, rather than encouraging drivers to switch to electric.

“The rebate and stamp duty incentives increase demand for EVs in a market where there is constrained supply,” the advice said.

“As such, much of the benefit of these incentives is passed on to manufacturers in the form of higher prices.”

On the rebates, Treasury said that there “is no clear evidence” to suggest they worked to encourage people to buy EVs “ beyond what would have happened naturally”.

The biggest winners from the tax breaks and rebates are voters in Liberal electorates in the North West, according to government analysis obtained by the Telegraph.

The five postcodes who have received the most tax breaks to date are Kellyville, Baulkham Hills, Nelson, Castle Hill and Lane Cove West.

All five are in Liberal-held electorates.

Mr Kean disputed the Treasury advice that said the measures did not work.

“I was always happy to support Treasurer Perrottet and the Transport Ministers EV 2021/22 policy, as was the EV Council and its members including News Corp, for example the rebates have seen a tripling of EV sales since they were introduced, causing the Australian Automobile Association to say that sales have increased across all of Western Sydney,” he said.

Tax breaks for electric vehicles are set to be on the chopping block at next month’s budget, Premier Chris Minns has signaled, saying the scheme has only driven up prices for buyers.

Mr Minns on Monday said a decision on the set of tax breaks and rebates currently available to EV buyers would be made in next month’s budget.

But the Premier suggested the scheme could be axed as his government took into consideration the policy wasn’t having a “material effect” on the price of EVs.

“We’ve got that analysis in which says that the rebate…or the incentive that’s being paid is not having a material effect on the buyers of EVs,” he said.

“In fact, it’s affecting just the price of going up by the subsidy amount in the marketplace. So that’s something we have to take into consideration.

“We’ve got a subsidy in place that is pushing up the costs of EVs…any government faced with that set of policy circumstances would have to take it into consideration.”

Mr Minns also signaled the $5b childcare and economic opportunity fund, which was established partly in a bid to build more childcare centres in regional NSW where there are none, would also be reviewed.

“Everyone in state parliament wants to direct their policy solution so that we can boost workforce participation, particularly women, and provide meaningful alternate early childhood education and childcare opportunities for families,” he said.