"The NSW Coalition government's 2017 budget might be better described as the ‘biggest con-job in the Western world’," Susan Price, Socialist Alliance candidate for Ashfield in the upcoming Inner West Council elections, said on June 21. She was responding to state Treasurer Dominic Perrottet's declaration that his inaugural budget was "the envy of the Western world".
"Having sold off the state's electricity network for an estimated $20 billion, the government now boasts it is investing billions in hospitals and schools. In fact, the people of NSW have lost a huge source of long-term revenue from the privatisation of major public assets such as the power industry and the Land Titles Office, and now the [Gladys] Berejiklian government is trying to trick people into thinking they've got a bargain," Price said.
The government's stamp duty income on residential property soared almost 10% to $6.8 billion. With a forecast 6% increase for each of the next three years, it is clear that Sydney's insane housing market is providing a huge boost to the state's finances.
But how long will this housing price bubble last? There are already signs that Sydney's property boom is starting to cool off.
"The government is living on borrowed time," Price said. "The state's revenues, like those of the Western Australian government, which collapsed when the mining boom subsided, will eventually fall when the housing bubble bursts.
"That's why the labour movement and the NSW community need to fight for the ongoing rights of all residents to affordable rents and increased public housing, and for genuine measures to make housing available to first-home buyers at reasonable prices."
The Treasurer’s budget speech on June 20, revealed surpluses totalling $12 billion this year and $73 billion in planned infrastructure spending over the next four years. The main expenditure items are $7.7 billion on health and hospitals, $4.2 billion on new and upgraded schools and $11 billion on transport, especially roads, this year.
The last item includes $3.2 billion set aside for the controversial WestConnex tollway, which is due to be privatised in the near future. The government is also preparing to sell off the state's share of the Snowy Mountains Hydro scheme.
Very soon there will be no substantial public assets left to sell.
As state Labor opposition leader Luke Foley pointed out, the announced spending on hospitals is a "cruel hoax", due to their proposed completion dates of 2024 and 2025. Shadow treasurer Ryan Park said the government should use its surging revenue from stamp duty on house sales to accelerate the hospital upgrades.
According to NSW Greens Treasury spokesperson Justin Field, the state budget is “a lost opportunity to invest in a future where people are given opportunities to build a good life for themselves, where we protect our environment and ensure a healthy climate and good public services.
"There is not one mention of climate change and no real plan to ensure young people can afford a home or a place to rent in the future. Is that wise? Is it fair?”
Greens transport spokesperson Dr Mehreen Faruqi said the NSW budget had once failed regional communities, with no significant boost in funding for public transport in regional NSW. Faruqi said: "It is embarrassing to see the treasurer gloat about keeping billions of dollars locked away in surplus, but fail to make a big investment in public transport for people outside of Sydney. The money is there, the need is there, all that is missing is the political will.
"Literally billions of dollars is being wasted in Sydney while the government ignores opportunities for new regional rail or for a big expansion of the bus and community transport in Northern Rivers, South Coast and other areas."
Meanwhile, more than 500 jobs from TAFE will be cut in the middle of a skills shortage. In the budget papers, TAFE full-time equivalent (FTE) workers for 2016–17 is listed at 10,470, but in the budget forecast for 2017–18, that number drops by 501 to just 9969. The cuts will hit both TAFE teaching and support staff.