Coronavirus: Key projects face axe in bid to win backing for NSW wage freeze

The relocation of Sydney’s Powerhouse Museum and ANZ stadium upgrade are on the verge of being scrapped.

NSW Premier Gladys Berejiklian told reporters on Thursday she was still hopeful of seeing the measure pass through parliament. Picture: AAP

The multi-billion-dollar relocation of Sydney’s Powerhouse Museum and ANZ stadium upgrade are on the verge of being scrapped in order to divert funds to create jobs in regional centres of NSW, an effort being pushed by numerous members of the Berejiklian cabinet as the state faces up $20bn in lost revenue due to the COVID-19 pandemic.

Estimates released by the NSW Treasurer on Thursday showed that under a worst case scenario the COVID-19 pandemic could cut $10bn – $20bn from the government’s traditional revenue sources, all of which are expected to be impacted.

The figures were released to bolster the government’s case for freezing wage increases across the public services, which it says is necessary to find savings as unemployment continues to climb towards double-digit figures.

The Australian can reveal that work is underway to identify a list of regional and rural infrastructure spending initiatives that could be funded by at least $2bn that has been set aside for the Sydney-based Powerhouse Museum and ANZ Stadium revamp.

A senior government official confirmed that the scrapping of both upgrades was being actively considered, not only to better direct spending but also to try convince crossbench MPs to support its recently announced effort to freeze wages, a move which remains deeply unpopular.

“The tide is leading that way,” the official said, signalling a forthcoming announcement. “The rationale for more stadiums is dead. In the current climate it doesn’t wash.”

Labelled a “vanity project” by the government’s political opponents, the Powerhouse Museum relocation has been persistently criticised not just outside of government but also within the coalition partyroom and the Berejiklian cabinet.

NSW Treasurer Dominic Perrottet and NSW Deputy Premier John Barilaro are both in favour of scrapping the Powerhouse Museum project, estimated to be costing the government around $1.5bn. Mr Barilaro is also understood to be in favour of scrapping the ANZ stadium upgrade. He was unavailable for comment.

Neither the Powerhouse Museum nor the upgrade of ANZ Stadium, known as Stadium Australia, have commenced construction, making them easier to cancel though vast amounts of preparatory work and significant spending would still be lost in the process. ANZ Stadium is the centrepiece of a joint Australia-New Zealand bid for the FIFA 2023 Women’s World Cup.

Questions have been raised repeatedly about the necessity of these projects, particularly as the state endures an economic downturn. But on Wednesday these attacks increased in their intensity when it was announced that more than 400,000 public servants would have their wages frozen to save the government $3bn over the next four years.

To justify the decision, Mr Perrottet said this savings would be spent creating jobs, but this prompted immediate rebukes from the NSW opposition and crossbench MPs, who slammed the decision and vowed to oppose the policy in an upper house vote.

The government is now attempting to win over prospective supporters in the upper house. On Thursday Mr Perrottet and Finance Minister Damien Tudehope met with members of the Shooters, Fishers and Farmers Party to try persuade them to support the wages policy, though Mr Borsak told The Australian these efforts were unsuccessful.

He said he was sounded out during the discussion about whether scrapping the Powerhouse Museum relocation and ANZ stadium upgrade would help procure his support.

“(They) asked whether it would make a difference, and I said it wouldn’t. We’re not going to be bought off in the short term,” Mr Borsak said.

NSW Member of the Shooters, Fishers and Farmers Party Robert Borsak. Picture: AAP

Without the support of the SFF, the government is likely to be outvoted by a disallowance motion expected to be moved against the wage freeze in the upper house.

Questioned about alternative avenues on Thursday, Premier Gladys Berejiklian told reporters that “other options” would have to be considered if the disallowance motion was successful. This includes an appeal to the NSW Industrial Relations Commission, or introducing the measure as legislation, instead of regulation.

“If this option isn’t accepted by the upper house, we’ll have to go through those other options,” Ms Berejiklian said.

The relocation of the Powerhouse Museum was signed off by former NSW premier Mike Baird as an election commitment in 2015 in response to a business case that requested funding. The museum’s operators said its premises, in Sydney’s CBD, was “designed for 19th and 20th-century collections” that had constrained the museum’s capacity to “move with the times”.

Labor’s shadow arts minister Walt Secord said the project remained a blight on the government and backed calls to redirect funding to regional projects.

“Not a single shovel of soil has been lifted at Parramatta after more than half a decade and it is time that the Premier and Arts Minister Gladys Berejiklian realised that the tiny support for the relocation has totally evaporated,” said Mr Secord.