From today’s Crikey email, The University of Western Sydney’s Phillip O’Neill makes a fascinating point about the infrastructure announcements in the budget, and, specifically, a very odd omission:
Finally, there is the curious case of Sydney. For once in modern political-economic history, the Emerald City is looking on. Whitlam’s city, Keating’s city, Howard’s city, Labor’s homeland city, got nothing from the infrastructure announcement. There is much untold about this extraordinary snub. On post-budget morning NSW Treasurer Eric Roosendaal explained the Rudd-Swann brush-off by claiming his state was already spending big on infrastructure, and that the other states needed federal assistance more than his state.
The only thing stopping Sydneysiders collapsing with mirth at the Roosendaal statement is that they stopped being amused by NSW Labor ministers a long time ago.
It’s been widely reported the submission from the NSW state government to Infrastructure Australia were viewed as substandard. But it’s pretty incredible that the government would leave out Australia’s biggest city – and one in dire need of better transport infrastructure – from its infrastructure spending.
So what is going on? The feds trying to teach state bureaucracies a lesson? If so, it’s a pretty bloody politically risky lesson. A timing gambit, to maximise the impact of any announcements in NSW closer to the state election in 2011 – surely that’s unlikely, given that the feds will go to the polls before that?
In any case, it doesn’t seem like it’s good news for Sydney – or Australia – that for some reason the federal government has developed an allergy to building needed infrastructure in Australia’s largest city.
Disappointing yes, but if their submissions were all as half-arsed as the totally moronic ‘metro’ proposal, I can’t say I’m surprised. If Rudd is half the bureaucrat he acts, then a stupid, uncosted proposal is bound to lose compared to better ones.
As a Sydney-sider it pains me, and yet the govt here is so astonishingly hopeless, I’m kind of glad someone’s called them on it.
I was in NSW Parliament today and it was absolutely hilarious watching the Labor MP’s get up and try and talk up what little NSW spending their was, then proceed to get laughed out of the room by the Opposition.
“But it’s pretty incredible that the government would leave out Australia’s biggest city – and one in dire need of better transport infrastructure – from its infrastructure spending.”
What were they supposed to do?
There are a number of problems with infrastructure in NSW and none of them are the fault or the responsibility of the Federal government. The most obvious issue is one Kevin Rudd pointed out a few days. There’s no coordinated planning authority in NSW and there’s far too much overlap and friction between the government, local councils, the Land and Environment Court and developers. This isn’t helped by a government that is in the pocket of developers and develops planning policy on the run. This may also be the case in other states or major cities, but as you point out, Sydney is Australia’s biggest city and a major contributor to GDP. Thus the flaws and the problems arising from those flaws are amplified. The editorial in today’s Sydney Morning Herald raised the idea of a Greater Sydney wide body similar to Brisbane City Council that would encompass most of Sydney and have responsibility for planning, transport and water. This is something I have been suggesting for some time – especially after travelling to cities that have used such a model successfully.
The second problem is the NSW government’s tendency to announce projects, spend tens of millions on feasibility studies, announce a tender and then scrap the whole thing and come up with another completely different idea (or none at all) Combine this with their aptitude for ensuring projects are billions of dollars over-budget and years late in their delivery and you have a situation where the private sector is extremely suspicious to invest or share responsibility with the government.
The final major problem, directly related to the budgets infrastructure announcement was the quality of NSW governments submission to Infrastructure Australia. The independent chairman said that the NSW submissions didn’t adequately address the criteria, provide enough detail or have robust costings. Infrastructure Australia did not have the resources to develop its own proposals and it would have politically and technically infeasible for the Federal government to do so. It’s hard to read the NSW submission without bursting out into laughter.
I live in Sydney and I am very upset that there was very little spending for new infrastructure given we have been neglected by State and Federal governments for so long. However, I believe the fault lies entirely with the State government and has very little (if anything) to do with Rudd teaching anyone a lesson.
I am sad that the proposals that I thought were the best in NSW, the CBD light-rail loop and the Green Square light-rail loop proposed by the City of Sydney, didn’t get up. I don’t really have an explanation as to why given I thought the submission was quite comprehensive and relatively cheap. However, given the CoS doesn’t have as many resources at State governments (nor is it similarly political inclined) it was probably unable to lobby as hard.
Hmmm: just a hypothetical. Say you were PM, and not *entirely* opposed to the incidental benefit of investing in the future of ALP state governments, while handing out the national infra-lolly.
And, say, one of them’s wearing a “I’m with stupid” t-shirt…
But given the importance of the issue, couldn’t the federal government have essentially sent the NSW proposals back with a pile of red pen on it for correction, rather than simply failing them?
“But given the importance of the issue, couldn’t the federal government have essentially sent the NSW proposals back with a pile of red pen on it for correction, rather than simply failing them?”
It wasn’t simply the quality of the proposals but what they actually were!
Eg. “You can’t polish a turd.”
And like I said above, the Federal government doesn’t have the time or the resources to do feasibility studies into what infrastructure you need where, how to delivery it and how much it should cost.
Political triage.
For the ALP, NSW is a loser.
There is no electoral ban for the buck in NSW for the ALP.
Yep, NSW Govt: land value only.
Katz: that’s exactly the phrase I was going to use.
But there’s not only the state party to consider…
Probably this. It’s as old as politics. The NT has a series of health scandals, suddenly there’s big bucks for health infrastructure.
I imagine Possum would have some nice graphs on whether this stacks up.
On that principle, its no accident VIC got rail money then.
Oz: I’m similarly mystified as to why City of Sydney’s light rail proposals seem to have been rejected out of hand. The only explanation I can come up with is that the NSW Govt somehow got the feds to dice it – the Iemma/Rees government seems to have an incredible aversion to light rail, and completely refuse to consider it either for the CBD or for the much-discussed extension of the current light rail through the Inner West to Dulwich Hill. Instead of spending maybe $80 million at most on that, they seem to want to spend tens of billions on a metro to Rozelle, an area which already has ample public transport. I honestly have no idea what they’re thinking most of the time.
I think a common sense proposal would have been to ask the feds to cover the shortfall which led to NSW canning the Northwest and Southwest Rail Links in the mini-budget. They were already well into the planning and budgeting process on those, so it would have been exactly the sort of ready-to-go-right-now infrastructure project that Rudd wanted. Too late now, I suppose.
I agree with previous posters, and would like to add the following:
1. The Libs will come to government in 2011 with nothing on the plate. When Wran came to power in the ’70s, he had the Eastern Suburbs Railway and a few other legacies from the Coalition to go on. When Greiner led the Libs to power a decade later, nuthin’. When Carr came to power in the ’90s, he had the Olympics. It’s a cliche that whenever governments come in the economy is worse than expected, but when the Libs try that on in 2011 who’ll call bullshit on that?
2. Notwithstanding the above, if they’re going to make the Yoom and the Pacific Highway dual carriageway all the way, it would appear that much of this will go through NSW – although, granted, not really affecting Sydney in a direct way.
What do ya mean?
The ABC got a budget increase – that’s money straight to NSW!
Sydney notably absent!
And no help with the boondoggles of freight rail transport in and out of Sydney either. As Bryn @ 11 states the southern and northwest proposals were canned by Rees earlier. What a pity Federal Infrastructure Minister Albanese (Marrickville/Grayndler) couldn’t whisper to Rees’s deputy that it might be a good idea to dust them off quick sharp. Anyone who travels the northern coastal route might wonder if sea level rise will finally spur someone in Macquarie St to get serious about any northern rail exit from the emerald city.
Whatever the reason, i can’t help but feel kinda relieved. Giving money to the current rum corp wannabes in Macquarie street seems a bit like giving money to a heroin addict, even if they have good intentions you can bet your bottom dollar it’s highly likely to be wasted.
It really has gone beyond a joke. I think it was in crikey a while back that someone had an article comparing the cost of building a heavy rail line per km in Perth and Sydney. The conclusion was that it costs, from memory, three times as much in Sydney. I’m not sure Mr F. O’barrel will be the saviour, but these jokers really have to go.
I would be interested to know if the second rate Labor hacks that are ‘running the state’ are aware of how much they are detested, if they are aware that not even Bob Carr levels of media management can save the day.
Wetmale, I think they are. 20-25% swings in Ryde and Cabramatta recently. I don;t think its so much a matter of saving the day as saving the furniture. An election loss where the Coalition had a 10 seat majority would not be considered that bad a result for NSW Labor.
I think it is much more about Rudd the bureaucrat than Rudd the score-settler. I don;t seem to note Perth doing badly put of the budget, so I don’t think it is seen as a Labor/Liberal thing. I do think that Rudd’s gut instincts all run against attempting to trump policy process with the political card. Trujillo and McGaughie got this wrong with Telstra and the NRN, and I think NSW Labor may be paying the price for poor documentation and a general lack of attention to detail in their submissions.
Mind you, there are a few heads near the top of NSW Labor that Anthony Albanese wouldn’t mind seeing getting a kick.
Robert, I was implying that the manoeuvre was tricky, rather then intelligent.
I’m hanging out for the column from Glen Milne where he explains how the budget is shaped around Mark Arbib whispering in Kevin Rudd’s ear about how to solidify his base to ward off a challenge from Julia Gillard.
This is the link to the Crikey article entitled Why rail projects in NSW cost three times as much as they should. It’s a good article.
After reading it, and thinking about the manner in which projects have been approved and funded in NSW since the Greiner years, its hard to avoid the conclusion that NSW has become the poster child for rampant corporatism. We have the the political class, the bureaucracy and private industry actively conspiring to defraud the public treasury for their private benefit.
No doubt the NSW government would be more concerned about the distribution of infrastructure payments if they actually thought they were being put at a disadvantage. They aren’t, not remotely. Under any reasonable reading of the budgetary papers notes on federal fiscal relations or the Commonwealth Grants Commission’s 2009 update report, Federal government money is usually give and take, with the end result being a sort-of fairness of service provision.
To explain, briefly, State governments have three main sources of revenue, their own taxation, tied Federal government payments, and GST money. However, GST money is distributed in such a way as to allow states to provide an equal level of service to their populations, given their respective revenue streams. And Commonwealth money, including infrastructure, counts as revenue. Money that doesn’t go to NSW in this year’s budget comes back to them in higher GST payments.
There may be some financial reasons why it is better to have Federal money than list it under State debt, and there are certainly political reasons why John Brumby would like to tie infrastructure spending to Federal grants. But Sydney only “lost” if you have a thing for watching Federal ministers cut ribbons.
It’ll be an issue of organisation, I’m sure. Rudd wanted instaprojects that were all planned, costed, organised, ready to go. There’s politics in that, to show results quickly, but also economics, in that the purpose of quickly stimulating the economy is not so well served by something that’ll take 5 years to get started.
Luckily we are just floating around the “blogosphere”, as those in the journosphere like to say, because at this point I’d have grabbed Terry by the lapels and said: fuck saving NSW Labor Terry, they’ve been in government for 60 of the past 80 years and they are to blame for the State’s completely buggered infrastructure.
Barry O’Farrell might not do absolutely everything that you might wish for from a Premier of NSW, but he will most assuredly not be worse than re-electing any Labor Premier, whoever it is we’re replacing the garbo with this week.
No, I haven’t become a Liberal again, I’ve been clean for nine years now – but this is what it takes to get the state (both public services and private enterprises) working again. We all have to make sacrifices, and NSW Labor has to lose state government.
You’re forgetting the Wran years, gianni, and the $2m Opera House which cost >$100m and still needs work. Now that private industry aren’t making any more money because the city is grinding to a halt, there has to be a circuit breaker and none of the “fixers” within NSW Labor can actually do anything other than make it worse.
Russ: GST payments are weighted against NSW and in favour of Queensland and WA. There isn’t any extra money for NSW in your “swings and roundabouts” model that is so simplistic it belongs on catallaxy. Besides, a government that spends money that it is not responsible for raising is always going to shirk responsibility.
Armagny: None of the projects identified are “shovel ready”. Few, if any, will be underway by the next Federal election. That said, NSW was lazy and stupid for whacking in back-of-the-envelope calculations.
The NSW Liberals are in many respects as lazy and stupid as Labor, and it’s part of Labor’s ascendancy that those Liberals act out the role Labor has set for them. It’s depressing, Definitely Worse vs Could Be Worse; but wittering on about corporatisation or removing NSW Labor’s agency by making them out to be victims of wider forces isn’t helpful in understanding what to do here. The boil needs to be lanced. The structural integrity of the boil or the cleanup afterwards is a non-issue.