Anna Caldwell: Treasurer ready to splash the cash for post-COVID recovery
Factional infighting is finally taking something of a back seat to finding the ideas that the state needs to get out of the COVID doldrums — even if they are expensive, writes Anna Caldwell.
Opinion
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At a private dinner of the NSW moderate faction on Wednesday night, MPs were eyeing the state budget as an opportunity.
Environment Minister Matt Kean spoke up, saying it was not the time for “fiscal conservatism”, not the time for a tight budget and not the time to recoil from big government spending.
He said while there was a view among some elements at NSW Treasury that we must be careful with spending, creating jobs was much more important than protecting the financial position.
He told the meeting that while the government is excited about its “baked in” $100 billion investment in infrastructure, it must go further.
Kean said there were three options: increasing taxes, accepting a lower standard of living or borrowing.
“The answer is obvious,” Kean said.
The moderates’ dinner, held on Wednesdays in sitting weeks in the President’s dining room and usually featuring pizza, have in recent times become notorious for factional scheming.
In fact some of the unmendable cracks between the Liberals and Nationals can be traced back to leaks from this dinner, such as the time they speculated on who might be the easiest Nationals leader to work with.
But Wednesday’s event, to which turncoat former Nationals MP Leslie Williams dutifully fronted up for her first official factional event, was policy focused.
It’s a welcome relief from the high-level scheming that remains ongoing to this day in the Liberals versus Nationals spat.
Indeed the government has a once-in-a-lifetime opportunity with the state budget to set NSW up for its survival and then ultimately rebound from the COVID doldrums.
The NSW Budget is now less than two months away and is the sole daily focus of Treasurer Dominic Perrottet.
Faced with the most important budget in a generation, it is now crucial that the tales of infighting and drama are put to bed and every government MP keep their eye on the thing they are sent to Sydney to do — govern.
For Perrottet, there is a big mood to put the economy before the budget bottom line.
We know already to expect a massive deficit.
I’ve been told that Perrottet wants to focus on “dual horizons” with the budget.
In the short-term, it will continue with temporary stimulus measures to help business create jobs and boost skills and training.
But it will also have a medium to longer-term focus, which will see support wound back with a program of fiscal repair designed to reduce deficits.
Perrottet, who has long talked about reforming stamp duty and payroll taxes, still has a laser-sharp focus on boosting productivity and growth through economic reform.
He is in regular contact with Federal Treasurer Josh Frydenberg.
Transport Minister Andrew Constance has also been lobbying the feds behind the scenes for funding for NSW infrastructure.
Constance wants to secure a 50/50 funding deal with the commonwealth for the Western Harbour Tunnel. This is exactly the kind of generation-defining construction that would truly change the face of Sydney and grow jobs and productivity, Constance says.
But behind the scenes, there is also major work being done on short-term measures to stimulate the economy with a particular focus on the CBD.
One idea raised last week at Perrottet’s ideas forum was the prospect of creating the CBD as a special economic zone, with reduced taxes, free transport and other perks as a means of breathing life back into the postcode.
One idea being closely eyed is bringing public servants back to work in the CBD rather than endorsing their ongoing work from home arrangements. The question the government is grappling with is whether the public transport system could safely cope with such an influx.
Ideas like free public transport if you wear a mask are also being considered.
Other ideas include modelling the economic benefits of a two metre squared economy instead of the current four metre squared limitations in enclosed spaces.
We saw NSW yesterday take significant steps in relaxing school, sport and music restrictions.
More families can now attend community sports, music ensembles and school camps can go ahead, and there has been an increase in dancing allowed at weddings.
All of these steps don’t just make lives better but they also drive the economy in the short-term which is just as critical as our long-term plans.
While the government remains shackled by health risks at this point in time, it has the opportunity to throw out the rule book when it comes to planning our economic recovery. This opportunity must not be squandered.
The best thing the government could do would be to stop the messy infighting and maintain a sole focus on what really matters.