Staggering multi-billion dollar cost of Covid response in NSW

An explosive new report has exposed just how much the NSW government has spent battling the Covid pandemic.

The NSW government has spent $7.5 billion in largely borrowed money to battle through the Covid pandemic.

An auditor-general’s report released on Friday broke down the cost of the pandemic from the first outbreak in January 2020 to June 2021.

Health expenses soared by $2.3 billion over the two years, coming to a staggering total of $25.8 billion.

Auditor-General of NSW Margaret Crawford released a report into the financial cost of the pandemic in NSW. Picture: Brendan Esposito

The cost of personal protective equipment (PPE) alone was $1.4 billion – and nearly half of the supply had to be thrown away.

The government spent a whopping $776 million on PPE that was either faulty or expired.

Of that, $159 million was spent on protective masks from an overseas provider that didn’t meet regulatory requirements and $20.7 million bought faulty equipment, also from an international vendor.

By comparison, the vaccination drive was a bargain, costing just $71 million, including the cost of distributing jabs and running vaccination hubs.

The controversial practice of quarantining travellers cost the state $613 million, while grants to keep small businesses afloat during the lockdown cost $795 million.

The Auditor-General’s report found the NSW Treasury allocated funding for specific programs without issuing guidelines on expenditure or outlining the mechanisms agencies could use to report spending.

Faulty PPE worth hundreds of millions of dollars had to be thrown out after it was bought by the NSW Government. Picture: Vincent Jannink

NSW Shadow Treasurer Daniel Mookhey said the failure showed a lack of transparency in relation to government spending.

“Every dollar the Premier spends in the coming budget has to have a clear and identifiable public benefit,” he said.

“We can’t afford to pay for more of this government’s infamous pork-barrelling.”

The report included the revelation that the NSW Government paid $131 million to contracts for ferry, private bus, light rail and Metro operators due to substantially decreased fares.

A joint statement from Mr Mookhey and Labor’s health spokesman Ryan Park criticised the “wastefully misused” funds as “a result of the Government’s addiction to privatisation.”

However, NSW Treasurer Matt Kean argued the government was protecting the population “while NSW Labor played politics”.

NSW Treasurer Matt Kean defended the government’s handling of the pandemic. Picture: Gaye Gerard

“Funds were made available for a range of programs, and unspent funds allowed further spending on the state’s efforts against Covid which continues to this day,” he said.

The report noted more than $13 billion in supplementary support has been allocated for the Delta outbreak since the 2021-22 Budget was announced, which has sent the projected deficit soaring to $19.5 billion.

Following this report, the Auditor-General plans to audit the effectiveness of the Covid vaccine rollout and the efficacy of the state government’s co-ordination of the pandemic response.

Originally published as Staggering multi-billion dollar cost of Covid response in NSW