A prospective 2021 plan in the making, the first 100 days of government and maintaining an AAA credit rating were topics addressed by New South Wales Premier, Barry O'Farrell, at a CEDA State of the State conference in Sydney recently.
Mr O'Farrell told delegates that the 100 day action plan had been established to lead Australia in sustainable economic growth and make New South Wales the first place to do business.
He drew parallels between the basket case economy within the state with the fiscal deterioration in Greece, Hati and Ireland.
"Treasury's main points were that New South Wales public sector wages growth is higher than New South Wales private sector growth and higher than the rest of Australian private and public sectors in a runaway trajectory since 1998," he said.
If expenditure continued at this historic trend rate NSW would be looking at a downgrade from their AAA credit rating in this term, Mr O'Farrell said.
He drew attention to the $5.2 billion black hole in the state's economy. However, he said that his government was not going to use this as an excuse for why things had not been acted on.
Mr O'Farrell reflected on the contents of the 2006 Stokes Vertigan report which showed that government spending was outpacing revenue growth.
Mr O'Farrell said that there was a need for tax reform and that such reforms could be implemented with more competitive taxes. In reference to this, Mr O'Farrell said they had already cut three taxes in their first 100 days.
"The imperative is to implement both immediate and long term measures to stop the rot with urgent action and to bring systemic reform to sustainably address the underlying reasons...in order to stand us in good stead into the long term future."
Mr O'Farrell's main objective here was to highlight the need to improve productivity in the New South Wales public sector so the non government sector could then optimise its potential growth and the state's overall economic growth could then be boosted.
"Productivity is the key to making New South Wales number one," he said.
"For sixteen years words like productivity and microeconomic reform were absent from the labour lexicon of governing in New South Wales while Sussex Street deals subverted the few sensible fiscal policies they occasionally came up with."
In the short term, Mr O'Farrell said the NSW government is finalising the September budget to cohere with their 2021 plan integrating the results of financial audits to rebuild the economy, return quality services, renovate infrastructure through a number of major projects and aim to make their policy transparent restoring accountability.
"The New South Wales 2021 plan will be released in conjunction with the budget on August 6th and will underpin funding agreements between agencies and treasury."
Implementation of a wages policy and the abolition of labour's no forced redundancy policy were also main points to come out of the 100 day plan, Mr O'Farrell said.
Looking forward, he said the NSW government intended to:
- Reduce taxes and boost job growth through payroll tax reduction
- Implement a fair wages policy
- Harmonise NSW occupational health and safety laws
- Accelerate land release to get home construction underway
- Extend the empty nesters rebate
- Repeal Labour's home buyers tax
- Fight for a share of commonwealth infrastructure funding
- Progress the widening of the M5
- Establish the restart New South Wales Fund
"A growing economy produces more revenue for services, it produces infrastructures and tax cuts. A growing economy produces confidence, it produces jobs and it allows people to get on with their lives," he said.
Mr O'Farrell also addressed immigration and population growth, explaining how a growing NSW population was an opportunity to raise skill levels to cater for current demand.
"I think we should be courting the skills and energies these people could bring to complement those within or boarders."
In summing up the first 100 days, Mr O'Farrell said: "If our hundred days looks workman like and boring, I'm not unhappy, get used to it.
"Hard work is never glamorous. Fixing a basket case as complex as NSW government was always going to be a long grind. Six director generals, twenty seven new pieces of legislation, three tax cuts. Day by day, policy by policy, reform by reform and in time result by result."
Click here for the event audio.