The state of NSW really is broke – thanks to the former Government
Regular readers of this column will know that for many years I have been pointing out that the NSW Budget was in a death spiral, feasting on itself. I pointed out regularly the incredible amount of borrowing that was taking place at the same time as assets were being sold off and at the same time as old incomes (e.g. profits from electricity) were being privatised.
With the change of Government in NSW, these Budget truths are now being told – very publicly. And it is not pretty.
NSW debt, our borrowings, will soon be at $180 billion plus. This cannot be prevented because of contracts that they signed. When the previous Government came to power back in 2011 they inherited just $22.5B in borrowings. So, over a 160 year period in which NSW Government existed, just $22.5B had been put on the credit card, while in just the past 12 years an additional $160B has been added.
Not only was $160B borrowed, but in addition to that, a further $100B of our states assets were sold off – and all of the money has now been spent.
Borrowed money is at the core of our state’s terrible Budget that has been completely wrecked by the outgoing Government.
The interest payments on borrowings is $7B per year. That equates to $134 million dollars per week, and more than $19M per day – just in interest payments! Between when you read this column and when you read my next column in 2 weeks, the state will have been required to pay $268M in interest payments.
That money could have built a new school or hospital every week, instead of just paying off debt that the previous government racked up. In fact, I want you to personally think about what you would like $268M to be spent on in our local area, and then share my frustration that it won’t be, because it will be spent on interest on debt instead.
But the destruction of our State Budget doesn’t end there. Because there is also an additional $7B (completely un-related to our interest charges) in commitments that the previous Government made that are not funded. Examples include the wages of 1,100 nurses and $700M for kids living under the care of our state.
I cannot overstate the incredible damage that has been done to the state’s finances.
That damage is even more alarming when we know, and we do know, that our health system is in crisis and our education system is in crisis. These are issues that must be addressed, but not only did the previous Government not have a plan to address them, they even made sure that there was no money available to address them.
Our state was overdue to take a new direction and voters have made that possible. Unfortunately, we will be trying to plot our new path from a position of being fundamentally broke.
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For enquiries regarding the State Government or its departments, or to put you in contact with someone who can help, please contact my office. My office can be contacted by phoning 4991-1466, by email to cessnock@parliament.nsw.gov.au or call into 118 Vincent Street (PO Box 242), Cessnock 2325.
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Cheers
Clayton