Miranda Devine: Gladys helped NSW move from basket case to shining light

It’s not often a treasurer gets to be a hero, but through a combination of good luck and prudent management, Gladys Berejiklian unveiled a set of impressive numbers.

Miranda Devine.

EVEN in the NSW budget lockup on level 21 of the state office block in Martin Place, the Baird government’s famous parsimony was evident yesterday. Caffeine junkie journalists gathered at 8am to peruse this year’s accounts had to dig into their own pockets to pay $1.50 for their own Nespresso.

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Not that they minded, since it was one sign that NSW Treasurer Gladys Berejiklian is watching every penny of taxpayer’s hard-earned cash.

It’s not often a treasurer gets to be a hero these days, but through a combination of good luck and prudent management, the state’s top bean counter yesterday unveiled a set of impressive numbers in her ­second Budget.

It’s not often a treasurer gets to play hero, but Gladys Berejiklian has gone close, Miranda Devine writes. Picture: Chris Pavlich

NSW has gone from the nation’s economic basket case after 12 years of Labor profligacy to its shining light. You wouldn’t live anywhere else in Australia for quids.

“We’re in control of the Budget and the Budget does not control us,” she said.

“We’ve gone from worst performing state to best performing state … (through) five years of hard work.”

When the Liberals came to power five years ago, NSW faced a deficit that would have blown out to $2.4 billion last year.

Instead we have a surplus of $3.4 billion this year, the fastest economic growth in the country, the highest consumer confidence, the lowest unemployment rate (5.2 per cent) and close to zero net debt.

Debt of $663 million is 0.1 per cent of Gross State Product, compared to, for example, Queensland’s whopping 8.8 per cent.

Gladys the Great has tamed the debt dragon.

Berejiklian yesterday also spruiked the “truly, really exciting” addition of 141,800 jobs, which is 63 per cent of all the jobs created in the country, not bad for a state that comprises just over 30 per cent of Australia’s population.

This Baird-Berejiklian feat was made possible in much the same way that Howard-Costello whipped the federal Budget into shape. The Budget windfall follows record high stamp duty, and assets sales, including $10 billion in electricity assets, combined with modest restraint of public service wages and back office costs.

Berejiklian boasts the improved Budget has allowed record infrastructure spending of $73.3 billion over four years, more on roads, rail, hospitals, schools and “help (for) those most vulnerable”, such as $560 million on the state’s foster care system.

As well, three pesky business taxes will be scrapped, worth more than $400 million a year

The economic sunshine has never been brighter than this year.

‘NSW has gone from the nation’s economic basket case after 12 years of Labor profligacy to its shining light.’

However the sale of the electricity assets has a downside which hits the bottom line next year as a loss of around $1 billion a year in dividends.

Even worse on our wallets is the quasi-socialist distribution of GST receipts across the states, which means our share plummets over the forward estimates to make us $10 billion worse off by 2020.

“We are the victim of our own success,” says Berejiklian.

“NSW has always argued we should get our fair share (of GST) based on population. The drop in GST revenue is a challenge … but I’m not complaining because it’s a result (of the fact) we are the strongest state in the nation.”

For every $1 raised from the GST we will receive back just 81c, while profligate states such as Queensland and South Australia, which refuse to live within their means, are rewarded.

The arcane formula for distributing GST among the states and territories operates on a needs basis rather than on a fair share per capita.

It provides little incentive for go-ahead states like NSW to reform, make savings, offer citizens tax cuts and improve services. But Berejiklian and her Treasury head Rob Whitfield are relatively sanguine about NSW’s GST plight.

“That’s why we have to control our expenses growth, which is what good governments should do,” she says.

Malcolm Turnbull’s cunning ploy at the last COAG meeting of offering the states the opportunity to raise their own taxes to pay for perceived federal cuts to health and education, now emerges as a political masterstroke.

Effectively it killed state pleading.

Now the Baird government, previously at the forefront of pressure on the federal government to raise the GST to 15 per cent, doesn’t even mention those mythical cuts to health and education which stemmed from Labor’s unfunded promises before the 2013 election.

Instead, yesterday, Berejiklian talked up the $1 billion in additional health spending NSW received at COAG and said, as far as extra education funding from the federal government goes, “the conversation is ongoing.”

One of the dark clouds on the horizon, Berejiklian admits, is housing affordability, and she doesn’t have much of an answer other than to say that, with 70,000 new dwellings approved in the next 12 months, the forecast apartment glut in Sydney is a housing bonus: “If you care about housing affordability, that’s not such a bad thing ... more dwellings in the marketplace puts downward pressure on prices.”

She also points to a $1.1 billion social and affordable housing fund.

Ultimately, the health of NSW rests on the fate of the federal government — and Berejiklian managed to slip in the partisan political point over Labor’s proposed negative gearing changed: “I’m concerned the election of the Shorten government will jeopardise conditions in NSW.”

Perhaps less partisan was her observation that “we would prefer the better economic manager” win the July 2 federal election.

Amen.

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