Financial challenge ahead for NSW
It is now officially less than 12 months until the next NSW State election. Election Day will be Saturday March 23, 2019. Mark it in your calendar. As we head to the election I thought it worthwhile to consider some of the challenges that lay ahead for whom-ever forms Government come that March 2019 date.
Undoubtedly, the biggest problem coming is that of money. A number of significant changes have taken place over the past 8 years. The first of these is that the assets that NSW used to own, that made an annual profit that went into the bucket to fund all sorts of State needs, have been sold. Think electricity poles and wires. Now, no matter what your politics, you would have to agree that the fundamental truth is that the money once earned from the profit making parts of the State’s economy, are gone, and that will affect the future budgets.
Our second great challenge is similar. We in NSW still own a bunch of other properties that return a profit. Unfortunately, for our future Budgets, the next 30-35 years of profits from those businesses has been sold. What that means, as just one example, is that the rent from shop fronts in Darling Harbour that used to come to NSW Government, will now go to a private entity that has payed $198M so that they own the right to collect the rent for the next 30 years, which should earn them (the private entity) about $900M+ over the 30 years.
And a third challenge will be the cost of renting back the buildings that have been sold. As an example, take the Cessnock Service NSW building (used to be the RTA). The State sold the building but immediately committed to renting it back. After about 8-9 years of rent, we will have given back to the new owner all of the money that he/she paid for the building. Importantly the rate of rent will immediately hit the Budget bottom line. This is true of more than one hundred buildings across the State. We have gone from being owners, to renters. The growing value of each and every building will now belong to the new private investor, instead of the people and the State.
In all, the future Budget of NSW will be much different. In short we will have less money coming in and much more money going out. It doesn’t matter who is in Government in the coming decades, this financial mess is now set in stone and is irreversible. Welcome to short-term-economics.
Community Barr-B-Q’s have been a hit!
It has been brilliant to have so many people coming out to the various community Barr-B-Q’s. I have held 18 over the recent months, in every corner of the Electorate. Of course this means all points between West Wallsend to Wollombi; Edgeworth to Milbrodale; and Greta to Laguna.
Over the past 7 years I have now held 92 community BBQ’s. As I say to people that ask why I do the BBQ’s, there are a whole bunch of reasons why you might want to not vote for me, but I don’t want one of those reasons to be that I was invisible and that you couldn’t access me. Interestingly, when we get a good roll-up, seeing the community talk to each other and sometimes solve/answer the question at hand is a beautiful thing to watch. Thank you.