Vikki Campion: Broke NSW is living on a maxed out credit card
The NSW budget is perfect for bureaucrats who love spending money where there are no indicators of whether it worked, the politicians bounce along and the media claps while the interest bill climbs, writes Vikki Campion.
Opinion
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The NSW Government is like that perennially broke friend who buys a car with a payday lender and uses the credit card on $17 smoothies when water would suffice. Meanwhile, their interest bill gets bigger.
Our looming $9.6bn interest payment is so big that it could build a WestConnex ($16bn) every two years or duplicate a further 400km of Pacific Highway (about $22.8m a kilometre).
In what can only be explained by NSW Premier Chris Minns’s magical ability to hypnotise all in his orbit, Sydney media breathlessly reported “a lot of spending restraint” in this week’s budget, as if Tuesday’s offering was an austere effort and not one that is mindlessly continuing stimulus measures that the Berejiklian Government birthed into life during Covid to stop the locked down economy from collapse.
By next June, our gross debt will be 20 per cent of our state product, while our revenue will be 13.5 per cent of our state product, with no hope of paying it off. So our debt gets higher.
When the rating agency downgrades our credit rating because debt is too high, the cost of funds to the banks increases, and so do your interest rates. Together, the state and federal governments are running a net debt of more than 60 per cent of GDP.
Each year’s interest payment in NSW could pay for giant city-transforming and nation-building infrastructure projects.
We have lost sight of how chaotic this is. Billions don’t raise eyebrows in the press gallery or at home anymore.
Our interest payments for taxpayers in NSW will hit $9.6bn annually by 2029.
If you had $9.6bn on a credit card, would you bet your house on intermittent power to get you out of debt? NSW is putting another $2.1bn over the next four years in the “Transmission Acceleration Facility” to try to make intermittent power work on top of the $1.1bn it’s already spent.
There’s been nothing but pushback from those living in Renewable Energy Zones, and warnings from electrical engineers who understand how the grid works better than politicians, but they continue to waste more taxpayers’ money doing something that doesn’t work.
If it did, you wouldn’t need to hand out another $579m in energy bill relief this year, as NSW is.
How do you allow these state politicians to claim we have the cheapest energy while, in the past two years, we had to hand $693.2m in subsidies so households could keep the lights on? You don’t need to subsidise what’s affordable.
It’s one thing to splurge on smoothies and designer shoes when you are flush, but another to waste it when you’re skint.
People are more confident about paying a tax bill if it delivers critical services and builds strategic assets.
Yet this budget, is lacking in the latter. There is plenty of money for environmental water projects and more regulation.
This budget spends $948,000 on the regulation of dams and builds none. Monitoring dams won’t grow our economy but it does grow jobs for bureaucrats. You should be sacked if you spend a fortune on dams and there is no new dam. Yet, this government gets applauded for it.
The Treasurer also announced a focus on boosting housing finance without addressing why housing costs are as expensive as they are.
Houses are dear because it costs so much to build them, but all he is addressing is how to pay for an expensive home. What’s in a house? Timber, steel, concrete, wiring, regulations and approvals.
Did they open state forests to make timber cheaper? No. Instead, they have clamped down on where we can log timber, making it even more expensive and forcing us to rely on overseas countries without environmental controls.
Did they pressure their federal colleagues to remove the safeguard mechanism to make concrete cheaper? No.
Did they remove the burden of regulation to make housing cheaper? No.
Our homes are not expensive because they are full of Italian marble, but because they sit on reams of government regulation over the house itself and every material in the supply chain needed to build them.
This is the perfect budget for the bureaucrats; they love spending money where there are no indicators of whether it worked, and the politicians continue to bounce along while the media claps for free smoothies and new cars while the interest bill climbs.
FURTHER PROOF GREENS DON’T KNOW FIRST THING ABOUT FINANCES
In an otherwise depressing budget season for fiscal conservatives comes a reminder that it could always be worse … the Greens could be in charge.
In an exercise that soothes the spikiest dry’s hackles, the Parliamentary Budget Office (PBO) has revealed just how bad things could be by measuring the cost of our election commitments.
It’s post-mortem on the promises made during an election season reveals applying any stress test to the Green’s ideas, like taxing billionaires for free dental and a living wage, and the fantasy crumbles.
Under the microscope, all the Green policies to save money have no hope of paying for the policies to be spent.
The PBO has costed that gross debt under the Greens would more than double to $2.2 trillion or 46.9 per cent of GDP in 2035-36.
One such policy, “raise the rate”, would cost nearly $95.7bn over the 2025-26 budget forward estimates period because the PBO found “under the proposal, a person working full time at the minimum wage could be eligible for the JobSeeker Payment. In response, they may choose to reduce their work hours.”
Under a Greens government, public debt interest payments to pay for this and the rest of their policies would be around $136.4bn higher over the medium term. At a time of great global uncertainty, the Greens’ major money saver was to slash defence spending.
When everyone seems itching to go to war with one another, the Greens’ big idea was to ditch defence spending.
What a stroke of genius. We should run it past Ukraine President Volodymyr Zelenskyy on how that strategy works. Our defence strategy can be deafening the enemy with choruses of kumbaya.
What is most worrying is how the Greens still managed to get some 12 per cent of the vote.
LIFTER
Premier Minn’s new Office of Animal Welfare which is hoped will crack down on animal cruelty, including puppy farms.
LEANER
Sydney City Council’s latest crackdown on gas cooking. Stick to your musical bike paths and stay out of our kitchens.
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