Home Business Politics Here’s how NSW election promises will be paid for

Here’s how NSW election promises will be paid for

There's a lot of talk on both sides. But what's the bottom line?

Jack Derwin

Digital Journalist, Your Money

As voters in the New South Wales election get ready to cast their ballots on Saturday, the two major parties appear neck and neck with the polls indicating a potential minority government could emerge.

Looking to put themselves over the line, both have come out on the offensive on Tuesday as the parliamentary budget office (PBO) has released independent costing of the promises of potential Liberal and Labor governments.

Infrastructure

One of the major contentions of the NSW election remains infrastructure.

“We have a Labor Party that is running on a platform of increasing taxes – over $1 billion – and cancelling infrastructure projects,” NSW Treasurer Dominic Perrottet claimed on Trading Day.

Principally, those infrastructure projects promised to get the chop under a Labor government include the Sydney Football Stadium rebuild and the $800 million upgrade of ANZ Stadium.

But Labor leader Michael Daley is sticking to his guns on this issue.

“The people of NSW have a very clear choice now: if you want billions of dollars spent knocking down and rebuilding perfectly good stadiums, vote for the Liberals and Nationals,” he told media last year. 

Instead, Daley promised that the $1.5 billion saved from the projects would be put into schools and hospitals.

Economy

The move to cancel the stadium projects comes down to growing concern around NSW’s fiscal position.

As house prices fall, particularly in Sydney, the government’s projected stamp duty revenue has fallen along with it, forcing the government to write-off $9.1 billion of between the 2017/18 and 2020/21 financial years.

According to the PBO, Labor’s policies would grow the NSW budget surplus by around $1.4 billion over its four-year term, produced by tax increases and increased efficiency.

Those estimates rely on Labor’s promise to cut government spending on contractors, travel, advertising, lawyers, consultants and eliminating crossover between departments.

Labor does, however, propose to raise public sector wages by more than 3 per cent – a policy which isn’t included in the estimates.

In contrast, a Coalition NSW government would shrink the existing surplus ($846 million) by $700 million, with the Liberal party promising not to raise taxes.

“Whether it’s a tax on small business costing them around $8,000 a year, whether it’s a tax on trucks, on buses, on family homes, increasing taxes is going to have a significant impact on the economy,” Perrottet said.

But by not raising taxes, the Coalition intends to borrow $7 billion to the state’s debt if it wins the NSW election.

This, shadow treasurer Ryan Park claims, will lead to greater privatisation of NSW services, something that Labor has ruled out on its watch.

Perrottet meanwhile denies that the NSW fiscal situation is under pressure.

“Overall, I think New South Wales remains in an incredibly strong position,” he said. “Public investment in infrastructure is adding about half a per cent to our economic growth [and] significant jobs growth off the back of it.”

Whether that situation can continue remains unclear, however, as GDP figures weaken, and the construction and retail sectors slow.

Watch the full interview with Dominic Perrottet above.

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