Budget black hole could tie new Premier's hands
Sydney Morning Herald
Tuesday March 29, 2011
THE $800 million deterioration in the state's finances disclosed yesterday by NSW Treasury to the incoming state government has cast a cloud over the financial flexibility of the O'Farrell government in its early years.Yesterday, the new government was told it faces a $405 million deficit for 2012-13 as a result of the slowing economy, a significant deterioration from the forecast of a $432 million surplus foreshadowed in the mid-year economic review released last December.Speaking after he was sworn in yesterday morning, but before he received a briefing on the state's finances, the Premier, Barry O'Farrell, said he would not hide behind the poor state of the budget to not honour election commitments."We undertook the exercise of outlining our [budget] savings to guarantee ... we would deliver on our promises," Mr O'Farrell said.Before the start of the election campaign, the Coalition said it would cut $3.8 billion out of the government's costs and since then it has committed to further savings, such as merging electricity companies.The pressure on the state's finances will throw into sharper relief the planned release over the next week of the new government's 100-day plan, as it sets a range of policy targets to be established by mid-year.Already, the government has indicated a range of inquiries are to be held, from the recent sale of the state's electricity assets, through to marine parks and a clinical audit to find out how many hospital beds are in the health system across the state.The release of the government's plan for its first 100 days in office, which is expected to include a range of measures to clean up how the state is governed, comes as the new government has a long list of decisions awaiting attention.Some of the immediate issues to be clarified include appointing a new director of public prosecutions to replace Nicholas Cowdery, who retired recently, along with replacing Jim Spigelman with a new Chief Justice.Also to be clarified in the health sector are the new government's response to the federal government's health reforms, explaining what Mr O'Farrell will keep and what he will reject.With electricity, deciding whether there will be any forced cuts to the proposed capital spending plans of the electricity utilities, which may help take pressure off rising power prices, will be central to easing the concerns of many households over the federal government's proposed carbon tax.Barry O'Farrell‚„s first 100 daysAttorney-General-Appoint new director of public prosecutions, chief justice. Environment-Start proposed inquiry into marine parks.Transport-Commission feasibility studies into a rapid bus transit system for northern beaches and light rail extension to University of NSW.-Clarify which major road extension would be built ‚€œ either the M4 East or the M5 duplication Health-Outline response to federal health reform, explaining what will be kept and what will be rejected. -Complete promised clinical audit to clarify how many beds and what equipment and technology exists across the network.Planning-Clarify proposed direction of new mechanism for approving large developments, given plan to scrap part 3A approvals. -Clarify whether he will intervene in proposed Barangaroo development, particularly to halt proposed hotel development on the harbourWestern Sydney-Appoint a dedicated minister for western Sydney. -Build on the previous government's policy of making Parramatta the second CBDPolice-Trial sobering-up centres and new drunk and disorderly offence to reduce alcohol-related violence.Finance-Finalise audit of state finances.
© 2011 Sydney Morning Herald
