The NSW Government has handed down an unsustainable Budget reliant on volatile income streams that will undermine the State’s economic position in the medium to long-term, the Electrical Trades Union has warned.
NSW Treasurer Gladys Berejiklian has relied on one-off cash injections from electricity network privatisation and a stream of volatile stamp duty income from an unprecedented housing bubble to deliver a modest budget surplus, rather than secure sustainable long term income sources.
The union said that without the sale of electricity transmission company TransGrid, the Budget would have been in deficit to the tune of $7 billion, while Treasury will miss out on hundreds of millions of dollars in future tax and dividends the company previously generated.
“Prior to the 2015 election, our union warned people about the negative fiscal impact caused by privatising income generating assets,” ETU secretary Steve Butler said.
“It was a concern that was shared by many others in the community, including merchant bank UBS that issued a warning that privatising the state’s electricity networks would be bad for the state budget in the medium to long term.
“Today’s budget confirms these fears, with the one off cash injection from the sale of TransGrid propping up otherwise ailing state finances.
“If you remove the one-off sugar hit from the privatisation of the electricity transmission network, todays budget tells a very different story: one of revenue short-falls, deficit and poor economic management.
“The NSW Liberals and Nationals are relying on voodoo economics to hide their ongoing failure to act on creating sustainable long term revenue streams to fund our state’s future needs.”
The ETU challenged both the NSW Government and Opposition to rule out further privatisation of the remaining publicly owned electricity assets.
“The government and opposition cannot rely on unsustainable one off cash grabs in the future delivered through the privatisation of essential services.”
“Today’s budget is a clear example that privatising income generating assets for a one-off cash injection is not the silver bullet to solving the state's long term infrastructure and financial challenges,” Mr Butler said.
“We are demanding the Premier and NSW Opposition Leader rule out further privatisation of the remaining publicly owned electricity networks, including regional electricity provider Essential Energy and the remaining 50 per cent of Ausgrid and Endeavour Energy.
“It is disappointing to see that we were right when we said privatisation was bad economic policy, and it is now up to the NSW Government to correct its mistake by halting the sale of Ausgrid and Endeavour Energy and ruling out any further privatisation of the remaining publicly owned electricity assets.”