NSW budget confirms privatisation push

The NSW budget was handed down on June 16. NSW state treasurer Eric Roozendaal tried to spin it as a "beacon of hope" for the state.

If this claim rests on anything at all it is based on his prediction that the NSW budget will be back in the black in 2011-12. Roozendaal said it was a responsible budget that would protect and create jobs.

Yet unemployment in NSW is expected to reach 8.5% by 2010-11. There seems to be very little in the way of a "beacon of hope" for working people in this regard.

NSW recorded a deficit of $1.3 billion for 2008-09. Roozendaal predicted the deficit would be $990 million in 2009-10 and fall to $116 million in 2010-11. NSW would return a budget surplus by 2011-12, he said.

But the "beacon of hope" this represents is illusory for working people, who should not be concerned about the state running into deficit anyway.

Before the past several decades of neoliberal obsession with economic conservatism, running deficits to fund government spending to stimulate the economy was seen as a good way to deal with recession.

It is valid even within the framework of capitalist solutions to the crisis. And it is certainly preferable to deflationary options. So, the boast that NSW will be back in the black in a couple of years is no spectacular reason for hope.

The real issue is who will be made to pay for the budget shortfall — working people or the rich?

The claim that the budget will protect and create jobs is extremely suspect. The government wants to force a wage freeze with public sector unions — despite existing agreements guaranteeing pay rises.

In a June 1 meeting, public sector unions unanimously rejected this outrageous call. Workers should not have to bear the burden of the mess the capitalists have made.


Roozendaal has said there will be no mass sell-off of public assets, as is the case in Queensland.

Yet there is still a whole raft of assets the government wants to privatise.

The budget still included plans for the privatisation of the management of Parklea Prison. Plans to do the same at Cessnock Gaol were defeated in May.

Cutting costs in this way will bring poorer conditions for prisoners and prison employees. It's a completely unacceptable way of saving dollars. The prison system should be about the rehabilitation of prisoners, not a way of making profits.

Incredibly, NSW Lotteries is also up for sale. Legislation for that sell-off was introduced into NSW parliament two weeks ago.

The sale of the lotteries is a particularly nonsensical plan. The revenue raised from this source is practically a licence to print money.

The NSW Greens and the Coalition are both poised to block this sale. The Coalition, however, is not against the privatisation of NSW Lotteries as such Yet it is opposing the current sale to make political gain in the eyes a public generally hostile to privatisation. It also claims measures have not been taken to protect small businesses and newsagents who now sell lottery products.

The NSW government has also proposed the sale of the state's waste services.

So, despite Roozendaal's claims to the contrary, the NSW government's solution to the budget shortfall is very similar to Queensland's. Public assets will be sold to private interests at bargain-basement prices. This is not a responsible budget — it's a budget scandal.


The budget also failed to include any serious measures to combat climate change.

Eraring power station, the second-biggest coal-fired power station in NSW, will get $205 million to expand production. It already emits 12 million tonnes of carbon dioxide each year. Millions are being spent on expanding coal-fired power when renewable alternatives need to be developed immediately.

The plans of the NSW government to privatise the electricity retailers is also lunacy in this context. The introduction of the profit motive into the energy industry will drive companies to sell more energy rather than promote more sustainable power use.

Sixteen million dollars of taxpayers money will be spent to subsidise non-existent "clean-coal" technology. A further $71 million will be given to the mining industry.

The June 20 Sydney Morning Herald revealed that the budget also gives a $20 million handout to coal companies to subsidise freight costs. Most of this will go to coal giant Centennial Coal.

The NSW budget unashamedly puts corporate profits before people and the planet. It is also just the kind of budget big business wanted.

Indeed, Standard and Poor's rating agency had warned it might downgrade the NSW government's credit rating unless the privatisation of the states electricity retailers went ahead.

Since the budget, Standard and Poor's and Moodys have welcomed the measures and reaffirmed the state's AAA rating.