Features Australia

Don’t cheer for NSW

Aside from Covid, it’s a government of mushy lefties

19 June 2021

9:00 AM

19 June 2021

9:00 AM

The Berejiklian government in New South Wales is rightly patted on the back for its mature approach to the management of Covid relative to the other states.  Mind you, this is a low bar given the truly bizarre overreactions of the other states which have led to on-going freedom-sapping and economy-harming restrictions.

But we shouldn’t get too worked up about the quality of the NSW government. On every other measure, it’s just a pathetic, left-of-centre outfit pandering to all the fashionable woke and climate-related causes.  Many of the ministers would fit in very well with the Labor Party – actually, make that the Greens.

For them, there is no concept of limited government, of encouraging individual responsibility, of allowing markets to work.  Indeed, for most of the ministers, and sadly this includes the supposedly conservative Treasurer Dominic Perrotet, it’s bigger and bossier government all the way.

Let me deal first with Perrotet who should, by rights, be the shining light of a true Liberal party leader.  More recently, he has been captured by the allure of spending other people’s money and has allowed the state budget to run out of control, recording large deficits now and in the future. Between 2019-20 and 2023-24, it is not anticipated that the budget will be in the black in any year.

And when it comes to debt, it’s an explosive situation.  NSW government net debt goes from $19 billion in June 2020 to $97 billion in June 2024 – an increase of over 400 per cent.  Even Queensland, in its most profligate period, didn’t match this rate of increase in government debt.

And then there is Perrotet’s intention to impose property taxes on new homeowners who opt out of paying stamp duty. (Mind you, this will only be available for lower priced homes.) At this point, those home owners will be hostage to a government keen to fleece them as much as they can.  It could be the equivalent of paying an additional 50 basis points on the mortgage, particularly if the Valuer-General does the right thing by Perrotet.

But it’s OK because Perrotet tells us – OK he is told by the modelling boffins in NSW Treasury – that the ‘reform’ will enlarge the NSW economy by $11 billion over four years.  This is actually peanuts – around 0.4 per cent of gross state product – but what the heck.  The property industry has been baying for this change for years.

When it comes to being influenced by rent-seekers, look no further than the universities which have persuaded Perottet to allow international students back into the state. Using the talking points handed to him, he has declared that ‘this is a big win for the NSW economy’, falling into the trap of mercantilist thinking.

And in another mention of $11 billion, evidently this would be the cost to the NSW economy of not allowing in international students.  But it’s fine because they will come in on charter flights and they will be housed in special quarantine accommodation funded by the universities (which are funded by taxpayers).

Of course, if the treasurer is openly embracing rent-seekers, we shouldn’t be surprised that other NSW ministers would simply follow suit. Matt Kean, Minister for Energy and Environment, is clearly good at one thing: obeying instructions from the factional bosses of his party and offering up other people’s money and regulatory favours to green-tinged investors.

His plan to transform the electricity grid within the state runs the very real risk of pushing up prices and damaging reliability.  But he can always claim that he is saving the planet.  (Pause for laughing here.)

Of course, he has very little real understanding of either the engineering or economics of the electricity grid.  Even though the NSW government had done a deal with the federal government to guarantee additional gas, he was off bagging gas as even a transition fuel.

He was brought down to earth by spiking electricity prices and the need for the Tomago aluminium smelter to power down.  As a result, he has been very quiet about the federal government’s decision to fund the construction of a new gas plant at Kurri Kurri in the Hunter Valley.

A confrere of Kean is Andrew Constance, Minister for Roads and Transport.  He is the member for Bega.  He has been bitten by the electric vehicle bug notwithstanding the highly dubious environmental benefits of the switch, both because of the emissions intensity of the manufacture of EVs as well as the fact that at least 60 per cent of electricity is still being generated by coal.

He has some extraordinarily wacky ideas including providing free parking and free charging for all EVs. He also wants to ‘look at stamp duty incentives’ and to remove the luxury car tax threshold for EVs.

No doubt that will suit the poseurs from the eastern suburbs.  But given the typical price point of even the cheapest EV – around $50K – these sorts of interventions are highly regressive.

Demonstrating his complete ignorance on the matter, he has blasted the Victorian government’s utterly sensible decision to impose a road user charge on EV owners – actually, because of the weight of the batteries, EVs impose greater damage on roads than conventional vehicles.  Evidently, Victoria is the laughing stock of the world.  Yeh, right.

But, on the taxpayers’ dime, he’s been to Oslo (population 634,000) and he’s seen how EVs work.  Actually, if he’d been keeping up to date, he would also know that the Finnish government is in the process of winding back the excess subsidies paid to EV owners which are costing that government at least $US 1 billion per year.  And, yep, the EV owners are the higher income earners.

Don’t even get me on to the National party which is in coalition with the Liberals in NSW.  Pork-barrelling with a touch of agrarian socialism sums up that party’s approach to government.

So, my advice is to save your cheering for the NSW government.  It might have done a reasonable job managing Covid – the Berejiklian government was lucky to inherit a competent and decentralised public health team – but it really is not much better than either the Victorian or Queensland governments in most respects.

Let’s not forget that Gladys is fully on board with net zero emissions by 2050 and all sorts of other woke causes.

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