NSW Budget 2020: Dominic Perrottet outlines asset sale push
In an exclusive pre-budget interview, Treasurer Dominic Perrottet highlights the cabinet’s appetite for using asset sales to rebuild the NSW economy.
NSW
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There is a strong appetite in the NSW cabinet to expand the state’s asset sales program as it charts a way back to a stronger budget position in a post-COVID economy.
It comes as Treasurer Dominic Perrottet is targeting further opening up of the economy, including allowing one person per two square metres indoors, as a critical element of support for the state’s budget position.
Mr Perrottet presented his vision in a budget interview this week with The Daily Telegraph, saying he was prioritising the economy over the budget position but remained intent on mapping a path back to strong economic numbers for NSW.
The Treasurer answered “yes” when asked if he had an appetite to expand the government’s asset recycling scheme, where it sells or leases the state’s big assets in order to invest in new infrastructure. He would not be drawn on which assets he would consider selling off.
The Daily Telegraph understands some of the state’s rail assets have been contemplated as options in high level discussions but no decisions have been made.
Mr Perrottet said asset recycling had been the bedrock of NSW’s strong financial position.
“I will always look at opportunities to do that because we need to make sure our asset base is working for the state. Swapping old assets for new assets is incredibly positive,” he said in a pre-budget interview.
“We have to have that discipline rather than sitting on lazy assets for the sake of it. Swapping old with new ensures we can build our state.”
The Treasurer confirmed he was committed to investigating the sale of the remainder of Sydney Motorway WestConnex, which is currently the subject of a scoping study.
“The scoping study is soon to be released and we’re completely committed to maintaining that approach and we’ll have that announcement in due course when the scoping study provides advice on the best way forward,” he said.
“As opportunities come through I’m always working with Treasury around where opportunities are in the interests of the state. This is not an ideological thing.
“If the cabinet believes it’s in the best interest of NSW we’ll pursue it. It’s better to be criticised for doing something than doing nothing.”
Mr Perrottet, who has confirmed the budget will remain in deficit but that it is important the state retain its triple A credit rating because of the fiscal discipline that entails, said he believed financially the state came into the pandemic in a better position than most economies. He is part of a small group of ministers who have consistently pushed behind the scenes to open the economy further.
Asked directly if it was time for the state to double the number of people allowed indoors — allowing one person per two square metres — Mr Perrottet smiled and paused before answering.
“We’ll continue to work with health on that. Obviously from my perspective I want to do whatever we can to open up as much of the economy,” he said.
He conceded that early on in the pandemic he had been of the belief “health was winning too many of the battles”, but that now the state has done better to strike a balance between protecting health and the economy.
“We’ve done very well in that space,” he said. “Now with restaurants and cafes and most places we’ve gone to a 2 square metre rule outside.
“We’ll continue to have those debates and discussions around that. We want to keep people safe and keep the economy open.”
Pushed again, he said: “Ultimately these are decisions for government. I would love to see as much of the economy open as possible. We always have robust discussions and they will continue.”
The Daily Telegraph has already revealed the budget will put a cap on public sector wages, limiting pay rises to 1.5 per cent instead of 2.5 per cent in a significant saving measure.
It also includes planning funding for a Kogarah stadium, and the Treasurer has a vision to roll out more suburban grounds.
The budget will involve a significant investment in health services to continue to build the state’s capacity to manage the pandemic.
And small scale, screwdriver ready projects will be rolled out, including installing LED lighting in NSW schools.
Mr Perrottet said the impact of every decision on jobs must be measured.
“It’s easy to measure day-to-day case numbers, what’s not as easily seen are job numbers,” he said.
The budget would be in deficit, but the measures were “targeted, timely and temporary” and mapped a way back to a strong position.
Mr Perrottet said the lives of the next generation and the state’s future prosperity weighed heavily on him.
“Every single decision will have a significant impact on the opportunities our kids and their kids have and that’s not lost on me,” he said.
“Yes we’re in a pandemic but we can’t have a pandemic control our lives. We’re a resilient state, we’ve gone incredibly well so far but we’re focused not just on today but on the future.”
TREASURER DOMINIC PERROTTET ON ...
Keeping the economy open:
“It will be very evident in the numbers we are providing short-term stimulus to keep people in employment, and at the same time we need to allow the economy to open up.”
“It’s better to be criticised for doing something than doing nothing.”
On debt:
“Because of our strong fiscal management over many years, and that’s been fiscal discipline behind the scenes and the asset recycling approach, that puts our debt position in very good shape.”
On the pandemic:
“We can’t have the pandemic control our lives. We have to have as much of society operating alongside the virus.
“It’s easy to measure day-to-day case numbers; what’s not as easily seen are job numbers.”
“Every single decision will have a significant impact on the opportunities our kids and their kids have and that’s not lost on me.”
“We’re a resilient state. This budget is one of dual horizons — there’s dealing with today and the future so we leave the state a better place than we found it.”
On the 2sq m rule:
“We’ve done very well in that space. Now with restaurants and cafes and most places we’ve gone to a 2sq m rule outside.”
“We’ll continue to have those debates and discussions around that. We want to keep people safe and keep the economy open.”
On asset sales:
“I will always look at opportunities to do that because we need to make sure our asset base is working for the state.”
“Swapping old assets for new assets is incredibly positive.”