|
With the NSW economy contracting 0.1% in the June quarter, economists have now warned NSW is looking at a Budget deficit of $200 million*, Shadow Minister for Finance Mike Baird said today.
“The NSW economy is shrinking while every other state and territory is experiencing growth**. What this means in real terms is close to a further $500 million hole in the State Budget if this rate of negative growth is maintained,” Mr Baird said.
“We are now paying for reckless spending at the hands of Morris Iemma who increased the State’s debt from $14 billion when he took over as Premier to $42 billion over the forward estimates period.
“At the same time as we have seen this debt splurge, there has been no operating discipline. Since 2004, revenue has grown in NSW by 5.4% yet expenses have risen by 6.5%. In simple terms we have been living beyond our means.
“Despite Michael Costa also assuring taxpayers when he delivered the Budget in June that no items in the infrastructure strategy were dependent on the sale of electricity, now we see that was simply not the case.
“Standard & Poors have put NSW on credit watch and taxpayers have to accept the reality that announcements have been made that were not funded and there is no money left to fix the myriad of problems facing the State.
“The Iemma Government has for a considerable period attempted to conceal the poor condition of the State’s finances and has used budget tricks to hide the true story.
“In the previous Budget, Michael Costa included a $400 million land tax claim for the sale of Sydney Airport, which took the Budget out of the red. Since then both the Howard and Rudd Federal Governments have rubbished the claim and refused to pay.
“In the last Budget the Treasurer used old accounting standards to calculate unfunded superannuation, which reduced the liability from $19 billion to $12 billion. This has enabled them to avoid putting aside hundreds of millions of dollars each year for the future retirement of public sector workers.
“While we’ve seen the NSW Government trying to hide the facts with ‘feel good’ announcements, the truth is they weren’t funded and NSW finances are in crisis,” he said.
MEDIA: Lisa Harrington - 0406 726 880
* Investment Bank analysis 5/9/08
** Australian Bureau of Statistics, growth over 3 month period to June 2008
|
