NSW Budget 2015 overshadowed by electricity privatisation

By Kirsty Needham

This year’s NSW budget was always at risk of being overshadowed by the razzle dazzle of a recently-fought election, won with a $20 billion pot of gold.

Mike Baird’s promises of what he will build with the proceeds of electricity privatisation – a new harbour crossing, faster trains, bigger roads and high-rise schools – have trumped anything Treasurer Gladys Berejiklian can announce on Tuesday.

But the privatisation won’t be included in the budget – it hasn’t happened yet.

Two massive light rail projects have also already been outlined for Parramatta and the eastern suburbs. What’s left to promise to build?

Without the classic budget centrepiece of a big ticket infrastructure project, what is Berejiklian to do with booming stamp duty revenue flowing into Treasury’s coffers amid a Sydney housing boom?

Pre-announcements this week included hospital upgrades in western Sydney, restoring funding to Catholic and independent schools for building projects, and a new private prison to deal with the overcrowding that has resulted from new lock ’em up bail laws.

Berejiklian, the former banker who took over as Treasurer three months ago at Baird’s request, said she wants the government to do more than deliver major infrastructure; it has to improve the services that impact on everyday lives.

She wants the government to be seen to be protecting the vulnerable, with a $200 million boost to funding for out-of-home-care for foster children, and energy rebates for the disabled.

Smaller election pledges will be fulfilled – funding for after-school childcare, a $25 million fund for vocational training in technology, and the expansion of post-natal depression programs.

Those razzle dazzle election promises will also get a mention, with the budget allocating money to fast-track the planning stages of big infrastructure projects that will kick-off after the poles and wires are sold.

The big question is whether Berejiklian will move on housing affordability in a major way. The skyrocketing Sydney property market has sparked a national debate on how to prevent a generation being locked out of home ownership.

Stamp duty that will deliver a record $5.1 billion to the budget this year, with a month still to go, is also hurting home buyers and there are loud calls for change.

Berejiklian has said she is willing to consider stamp duty, but this is likely to be within a wider negotiation with the Abbott government over GST reform, later on.

Other states are moving faster. Victoria has imposed a stamp duty surcharge of 3 per cent on foreign investors, and a land tax surcharge of 0.5 per cent, after foreigners bought a third of new homes in Victoria last year.

The Baird government insists it is tackling housing affordability by increasing new housing supply through land releases. So it is the traditional housing supply lever that is likely to be pulled on Tuesday, and not anything radically new.

During the election campaign, Baird pledged to release another 20,000 sites for new homes on government land over the next four years, doubling the result from the previous term of government.

The Abbott government has also offered to release Commonwealth land, including defence sites, and will discuss the matter with the states in August. Neither measure is expected to be included in Tuesday’s budget.

This article was originally published in Sydney Morning Herald.

Recommended For You

About the Author: Akhtar Jamal

Tribune International