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NSW State Election: Let the Economic Debate About the Sustainability of Strident Neoliberalism Continue

By Denis Bright  

Premier Berejiklian has confounded the final pre-election Newspoll to achieve an effective working majority in the NSW Legislative Assembly. Even in the less than likely absence of an absolute majority of 47 LNP members, Premier Berejiklian can seek endorsement from the conservative independents from the seats of Sydney and Lake Macquarie.

It will take more time to assess the political character of the Legislative Council where the quota for successful candidates is just 4.55 per cent under a state-wide proportional voting system.

Mark Latham (One Nation), David Leyonhjelm (Liberal Democrat) can form a voting bloc in the Legislative Council with members from the Shooters, Fishers and Farmers (SFF) and the Fred Nile Group of Christian Democrats, to move NSW politics in a centre-right direction. It is a long-time since a NSW Government had a cruisy relationship with the Legislative Council.

The results from previous elections show the ongoing appeal of minor parties in the Legislative Council (Tally Room 2019):

Five members of the cross-bench of the Legislative Council retain their seats until 2023 including two Greens and one each from Animal Justice, the Fred Nile Group and the Shooters, Fishers and Farmers (SFF).

The size of the cross-bench is also likely to increase in the Legislative Assemble with SFF members from Murray, Orange and possibly Barwon. There are conservative independents of varied hues from Wagga Wagga, Sydney, Lake Macquarie and possibly even Dubbo which is still one of the doubtful seats on election night.

This fracturing of the traditional two-party system is reinforced by the re-election of three Green members from Ballina, Balmain and Newtown plus uncertainty of the result in Lismore as supplied by ABC News Online during the election count at 21.00.

As the election night count continued, Labor looked like gaining the seat of Coogee, rather than the most state marginal seat of East Hills prior to election day.

The net loss of seats to the state-LNP has also been reinforced by voting trends in regional NSW.

Despite Labor’s failure to gain more winnable marginal seats across Metro Sydney, the NSW election result is hardly a ringing endorsement of Treasurer Dominic Perrottet’s strident brand of neoliberalism.

Strong Economic Management: The LNP Treasurer Ace LNP Election Card?

Treasurer Dominic Perrottet has attempted to humanise and popularise the appeal of neoliberalism and the effects of recent privatisations in his press releases.

As a softener to the privatisation of NSW electricity generation, the NSW Government has established a Generations Fund which will manage some of the revenue generated to expand infrastructure and community development projects (Media Release from Treasurer Dominic Perrottet 19 June 2018):

“The NSW Generations Fund adds a whole new level of resilience to the sturdy financial foundations our Government has already built, to help withstand the budget pressures of an aging population in the coming decades.”

The NSW Generations Fund will grow through investment returns and future contributions. Following the proposed 51 per cent sale of WestConnex, the Government intends to place the State’s residual interest into the NGF, so ongoing returns on that asset are shared with the whole community.

The NSW Generations Fund will also deliver for people today with up to half of returns on the fund enabling My Community Dividend, a new initiative that empowers citizens to take more control over the way public funding is allocated to local projects. My Community Dividend will give residents an opportunity to nominate and vote on projects that strengthen and enhance their local communities. To launch the program, $27.5 million has been allocated in the 2018-19 Budget to fund projects expected to range in value from $20,000 to $200,000.

“My Community Dividend is about empowering the people of NSW to get the projects that matter to them and their communities off the ground,” Mr Perrottet said.

No-one could sensibly object to the formation of a Generations Fund. The political problem is its reliance on privatisation for the source of funding when real alternatives are available in a social market economy that can tap international and local corporate sources of finance for legitimate investment in infrastructure and community development.

In true neoliberal traditions, Treasurer Dominic Perrottet has also leased a 51 per cent share of the Sydney Motorway Corporation (West Connex) at a net gain of $9.3 billion to top up the NSW Generations Fund for additional general infrastructure funding and community development spending to $10 billion and $25 billion in a decade (Media Release 18 December 2018).

As the cash cow provided by privatisations is allocated by current expenditure and capital works programmes, the real challenge is a quest for alternative sources of funding (Parliamentary Research Service 2017):

After the sale of key public assets in NSW, the state LNP government is running out of new cash cows to privatise. Revenue from the long-term leasing of electricity transmission and distribution has been diverted into a Restart NSW Fund:

Restart NSW is the vehicle for the delivery of the Rebuilding NSW plan, which is the Government’s 10-year plan to invest in new infrastructure funded by the electricity network transactions, Commonwealth Government Asset Recycling Initiative payments, and investment earnings.  These proceeds are first deposited into the Restart NSW fund before being invested into infrastructure projects.

Infrastructure NSW is responsible for assessing and recommending Restart NSW projects which improve the productivity and competitiveness of NSW across all sectors. They include a mixture of NSW Government agency-led infrastructure projects, as well as local and community infrastructure projects led by local government, non-government organisations and other agencies, the majority of which are recommended following a submission-based competitive process.

The budget papers for 2018-19 show the projected decline in capital expenditure in the next three budgets to 2021-22.

Treasurer Dominic Perrottet has extended privatisation processes to some of the operations of NSW Treasury (NSW TCorp) (Media Release 13 December 2018). These changes will become operational in April 2019:

The contracts will cover all Government transactions including payments, receipts, cross-border banking and purchasing cards and are expected to save up to $5 million each year in fees and charges.

Treasurer Dominic Perrottet signed the contracts after an extensive tender process.

“The finance sector is evolving rapidly, and the NSW Government has selected the providers who will ensure we offer both the best services to consumers and are an early adopter of innovative technology and new ways of banking,” Mr Perrottet said.

“These contracts will also allow greater flexibility and as technology evolves, a better experience for the millions of people who transact with the Government each year.”

Other advantages, which will flow from the new contracts, include a more streamlined approach to transactions, more payment options for customers, improved security and greater use of digital payment options.

The three-year contracts will commence in April 2019 with the opportunity available for parties to extend the agreement by up to three years.

Westpac and ANZ will provide transaction banking services, payment services and cross-border banking services. Citi will manage the Government’s purchasing cards.

NSW Treasury Secretary Michael Pratt said this was an excellent outcome for the State.

“The new contracts set-up a platform for the NSW Government to execute its long-term banking and payment strategy by allowing us to tap into the expertise of a broader range of leading Australian and international banks,” he said.

One possibility is the opening of NSW Treasury loan raising to Investment Bonds to maintain the momentum of infrastructure and community development during the 2019-2023 term of government.

These options could be tested by the Labor Opposition through parliamentary committee processes available to review the economic dogmatism of the NSW Government.

Budget Papers 2018-19 offers a convenient short-term bench-mark in infrastructure spending in both the NSW Government Sector and in the Public Non-Financial Corporate Sector (PNFC) (Budget Paper No. 2 2018-19):

Public-private partnerships can also assist the private sector to achieve more social market goals from the equivalent of new projects like the existing Parramatta Square Project which is currently being managed by the Walker Group.

Treasurer Dominic Perrottet is protected from the macro-politics of NSW in his safe electorate of Epping despite a strong resurgence by Labor’s candidate Alan Mascarenhas:

As the privatisation bonanza of the state LNP runs out of fresh assets in a slowing national economy during the 2019-2023 term of the re-elected government, it is Labor’s responsibility to come up with viable alternatives to the slash and burn style of neoliberalism which has been the hallmark of the current government.

Denis Bright is a member of the Media, Entertainment and Arts Alliance (MEAA). Denis has qualifications in journalism, public policy and international relations. He is committed to citizens’ journalism by promoting discussion of topical issues from a critical structuralist perspective. Readers are encouraged to continue the discussions in this current series of Trending Issues for Australians in this national election year.

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20 comments

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  1. Andreas Bimba

    Most of the people of NSW clearly have very little understanding of the financial disaster the privatisation of shared infrastructure will impose on them further down the track in fees and charges. The financiers will make a fortune at the people’s expense which is classic neoliberalism.

    YOU HAVE BEEN CONNED.

    The federal government could easily have provided most of the funds for needed infrastructure.

  2. Baby Jewels

    Speechless. NSW is the new Bjelke-Peterson State.

  3. Harry

    Agree Andreas, the Fed could have done that. Money is not in short supply for the Fed but they of course prefer to perpetuate the falsity that they need our taxes before they can spend as part of their neoliberal obsession with small government either that or they are ignorant of economic reality since 1983 in Oz and 1971 in the US (when Nixon needed to fund the Vietnam war but was restricted by the rule that dollars had to be backed by gold, which was in limited supply).

    The Fed could fund a whole range of programs much more than it does— limited ONLY by the availability of resources.

  4. whatever

    Jodi McKay (Labor, Strathfield) was on the TV coverage I was watching. She described Facebook smear campaigns and bogus leaflet attacks against Labor candidates in numerous electorates.
    Then there were Liberal candidates like Dominello in Ryde, who campaigned on a “Stop the Property Developers” ticket.
    And Talk-Back radio which has become a 24/7 platform for AltRight stooges who pretend to be ordinary citizens.

  5. paul walter

    Having read it, I now really, feel like going out and getting drunk.

  6. calyptorhynchus

    Seems that the Libs strode to victory over the corpses of 20,000 dead koalas and didn’t lose a single vote. What’s the matter with NSW electors!

  7. Phil

    Seems that the Libs strode to victory over the corpses of 20,000 dead koalas and didn’t lose a single vote. What’s the matter with NSW electors!

    Easy they’re as dumb as a bag of hammers.

  8. Mia

    A very volatile state election result that favoured the Berejikian Government in the final week. I agree with Denis’ concern about the sustainability of the Generational Fund in NSW.

  9. Phil

    For mine it was the opposition leader, he had all the charisma of an x customs officer. Oh that’s right….

    Daley came across as being arrogant.

  10. Chris

    Compulsory preferential voting is the solution to the rise of the Far Right through the Shooters Party and One Nation

  11. DrakeN

    I agree Chris; it should be mandatory for voters to number each and every candidate.
    Party preferences admit for mindless tribalism.

  12. Leila

    The whole of Australia certainly needs major capital investment but at what cost to the citizens of this nation.
    Surely we can raise money in other ways apart from selling assets which ultimately proves to be more expensive for all of us.
    It is time for politicians on all sides to be honest with the community

  13. MöbiusEcko

    A little consolation, so far NSW Labor has 1.3% more of the primary vote than the Liberals and have won one more seat, it’s only the Nationals getting the Liberals across the line, as it has been for a long time.

    But the Nationals are dying a slow death across the board as their core constituents work out their party for rural Australia is actually a rubber stamp party for one that is against rural Australia.

    The Nationals are realising rubber stamping the Liberals and being thrown a dog bone and snacks every now and again isn’t going to help them survive anymore, so some are beginning to buck the Liberals. Mostly the Nationals policy backlashes against the Liberals have been either allowed to go through to the keeper or have been watered down to appease their Liberal masters. They have also been thrown the odd bone in the form of a policy framed as their own.

    In the long run, how this pans out has to be a negative for Liberal Parties nationwide, and at a time that will coincide with their running out of assets to privatise, with privatisation needed to pay the large sums required to keep the Nationals onside.

  14. James Robo

    The Infrastructure Programme of the NSW Government is not sustainable. Labor needs to push alternative economic policies on behalf of the regions and Metropolitan Sydney at both a state and federal levels

  15. Tessa_M

    Federal Labor is not going to cruise to victory without sound economic policies!

  16. Lambert Simpleton

    Like knocking down ok sports stadiums and building new ones, while hospitals and schools go begging?

    Or did you mean the ruining of the Darling for the benefit of vested interests, Tess?

  17. w ch

    Jeremy Corbyn in Britain has a policy to bring assets into public ownership. Daley didn’t have that and Daniel Andrews in Victoria has sold off a number of public assets. How many times do you hear Bill Shorten mention Corbyns policiest? Never. How many times did you hear Bill Shorten congratulate Corbyn in public when at the 2017 election he gained the biggest vote for Labour in an election since 2001? Zero. Labor has studiously distanced itself from Corbyn for precisely the reason that Corbyn has a determined and detailed policy to tackle neo-liberalism, Australian Labor is a right wing party that has no plans to seriously tackle neo-liberalism. If you want to know the truth about Australian Labor you just need to remember Thatcher’s words about Keating in her memoirs: “”Then it was on to Australia, I arrived in Perth, went on to Alice Springs, and arrived at Canberra. Here I visited the new Parliament building erected to celebrate the Bicentennial, and was met by Bob Hawke, who introduced me to his Cabinet, in which Paul Keating was then Finance Minister. Whatever differences of outlook we had on other matters, I found Mr Keating refreshingly orthodox on finance – a far cry from the British Labour Party”” – Margaret Thatcher, The Downing Street Years, Harper Collins, 1993, page 505. Just remember Chris Bowen is regularly in touch with Paul Keating, and of course it is mandatory for every current day Labor type to praise Keatings neo-liberal “reforms@. So anybody expecting an economic policy from Labor that is not neo-liberal, I would like to wish them the best of luck. The answer can not and does not rest with the Labor Party.

  18. Stella

    Denis, thanks for your interesting coverage of the NSW state election.

  19. rubio@coast

    In Gosford, voters made the Central Coast a safe Labor seat with a swing of 8.5 per cent after preferences. This should be an encouragement for the federal election in the seat of Robertson as the LNP vote was down by 7.5 per cent.

    More investment in infrastructure is essential for the Central Coast as this article tells everyone.

    NSW was once the sustainable planning state but now clearing of land for new housing estates is the big priority.

    If the koalas a vote, they might be disappointed in the NSW election results.

  20. Denis Bright in Brisbane

    The NSW Treasurer Dominic Perrottet still seems to be in election mode: https://www.theaustralian.com.au/nation/politics/perrottet-signalling-surpluses-despite-decline-in-stamp-duties/news-story/11f8924f3f60fa79bb942d2c11508236

    “Labor’s negative gearing and franking credits tax grabs were a handbrake on the entire economy. The election of a Coalition government provides a big boost in confidence, which is already showing signs of having a positive impact on the economy on multiple levels.’’

    Mr Perrottet said that unlike recent Victorian and Queensland measures, he would not be increasing mining taxes and imposts.

    “We have no plans to increase mining royalties in the upcoming NSW budget,” Mr Perrottet said.

    “It doesn’t matter what state you live in, Labor likes to spend your money like a drunken sailor, and usually with the same amount of planning.”

    Surely all this is old rhetoric? Let’s scan the NSW Budget 2019-20 for new initiatives when it is delivered on 18 June 2019.

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