NSW IN DEBT - PUBLIC SECTOR PAYS

Red News Readers,

The O’Farrell Government is worrying the financial markets not because the government has alienated the public sector so early in its term of government (what do the financial markets care about that?) but because of its borrowing program of $11.5 billion next year to fund infrastructure building. State Treasury is now forecasting that the State Debt will balloon to $80 billion over the next 4 years, up from $60 billion. Apparently what worries the financial markets is that this level of debt is being incurred without it being clear what the O’Farrell Government financial plans are.

Well now we know, at least in part. They plan public private partnerships wherever they can despite the fact that in opposition they were most critical of the Labor Government’s relationships with the private sector. To achieve all this infrastructure building , and repay debt, it seems that public sector wages hours and working conditions are going to be slashed, either by legislative control of wage increases, or contracting out the work of public servants to private contractors, not a worry to the O’Farrell Government as they don’t see public sector workers, particularly unionists, as part of their voting power base. But a very big worry to those public sector workers affected.

In my profession, nursing, how are we going to maintain wages and working conditions that recruit and retain quality staff? This is the big question that plagued the Labor Government and the Industrial Relations Commission over the past 16 years. Awards ratified by the Commission in that time were mostly consent awards between the Government and the Union, intent on addressing the nursing shortage, and the quality of care issues in the health system. The O’Farrell Government has most unfairly placed the blame for what they call the blowout in public sector wages under the Labor Government squarely on the shoulders of the NSW Industrial Relations Commission, but the truth of the matter is that as the awards made were consent awards, and the blame , if there is a need for blame, should be sheeted home to the negotiating parties.

All of this means a lot to the 12,000 public sector workers who gathered in Macquarie Street today. It would have been interesting to see how many public sector workers attended had there not been the level of intimidation and harassment in the workplace by managers who instructed public sector workers that they were not to attend the Rally, despite the fact that those workers were members of a union, and entitled under this country’s recognition of the freedom of association to attend. Where did the instructions for this level of intimidation come from?

The O’Farrell Government has started a war with the public sector unions. The Labor Opposition and the unions must be thanking O’Farrell for the organising gift that has been given to the labour movement which will unite and gel around a vigorous defence of the public sector. What the O’Farrell Government needs to consider very deeply, is what quality do they want to have in the provision of services traditionally provided by the public sector? Now that the Government has got the public sector’s back up, they can hardly expect that public sector workers are going to put their noses to the grindstone and make it all happen for a Government that has made it clear that it does not value the public sector. But obviously the big stick that is going to be held by the O’Farrell Government over public sector workers and unions is, do what we say, or we will contract your work out to the private sector.


Jenny Haines

NSW government to reassure backers

Eric Johnston. smh

June 8, 2011
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THE O'Farrell Liberal government will attempt to reassure New South Wales's biggest financial backers this month amid growing uncertainty about the scope of its infrastructure spending spree.

The meeting between Treasurer Mike Baird and the bond investors comes as the government pushes ahead with an $11.5 billion borrowing program over the next year, on the heels of last year's record $12 billion debt issue. Much of the latest funding issue is to roll over existing debt.

Figures from the state's financing arm, NSW Treasury Corp, revealed the state's debt is likely to balloon to as much as $80 billion within four years, up from about $60 billion.

Much of the increase is expected to come from increased investment by power generators. As well as raising funds from global and Australian investors to fund the budget, NSW Treasury Corp also raises funds on behalf of government enterprises such as EnergyAustralia and RailCorp.

With the O'Farrell government not scheduled to hand down its first budget until September, investors have expressed concerns about buying debt without knowing what its financial plans are.

This could push up the borrowing costs, particularly as problems with some debt-laden European governments are causing global credit jitters.

Economists have speculated that the government's infrastructure spending spree could see its borrowing program over the next year blow out by as much as $5 billion.

''There still remains a high level of uncertainty over the priorities for fiscal policy in the coming year in light of the clear mandate to increase infrastructure delivery at the March election,'' said ANZ's head of interest rate strategy, Tony Morriss.

The government has raised suggestions that it could call in the private sector to help fund its centrepiece project, the north-west rail link, which will cost about $8 billion. But its first step will be to thrash out with banks and finance houses ways of paying for it through a public-private partnership.

Last month the credit ratings agency Standard & Poor's reaffirmed NSW's AAA rating, saying the state was in a sound financial position.

Separately, the new head of the federal government's financing arm yesterday raised the prospect that the Commonwealth could become a big investor in bonds issued by state governments.

The chief executive of the Australian Office of Financial Management, Rob Nicholl, told an economics forum there was ''nothing to prevent us'' buying state bonds once the Commonwealth government started running budget surpluses. Such a move would make it easier for states with big funding needs to borrow.