Government | Regulation

NSW Premier says subsiding other states is painful

It’s very painful to give the Queensland Government more than $6 billion over the next four years, NSW Premier, the Hon. Gladys Berejiklian said at the CEDA NSW State of the State event.

“Over the next four years under the current system NSW will effectively subsidise other states and territories by $19 billion,” she said.
“Tomorrow we’ll be making a submission to the Productivity Commission about the need for changes in our model of GST distribution.”

Ms Berejiklian said it could be argued that the other states have not tackled the types of reform that NSW has.

“We know sometimes you do lose a bit of political skin to do what’s right,” she said.

“We encourage other states to do what NSW has done because the rewards are apparent, but it’s quite painful when you’re subsidising the other states who haven’t done the reforms we have, to the extent we are and certainly I believe it’s time to relook at that formula.

“We assume responsibility as the nation’s largest state, as its strongest economy that we do have a role to play in supporting other states.

“I can appreciate that some states have very unique circumstances and challenges, and we always should and will subsidise those states.

“But clearly not at the level that’s being indicated.”

Ms Berejiklian said there is time now to argue for a new model of dynamic federalism to replace the outdated concept of cooperative federalism.

“This is because when the federation was first adopted, the states were very similar in their populations, their scale and ability to contribute to the national economy,” she said.

“But now NSW is at a stage where I believe we need to move towards a bilateral relationship with the federal government, rather than assuming that all the states are going to have the same unique circumstances and agree on every single issue.

“For example, NSW currently has 42 national agreements with the federal government, that is too many and I want to see that number reduced substantially so that we can get on with the job of not having any barriers to future growth and opportunities for the people of NSW.”

Ms Berejiklian said at a time when there is so much global political uncertainty, and in some places economic uncertainty, NSW is not just growing and thriving but growing faster than any other Australian state and territory.

“Today we’re driving about 90 per cent of all output of growth in Australia and we’re extremely proud of that position,” she said.

“Our challenge into the coming years is to sustain this success, to take NSW to the next level.

“It’s to continue building a stronger, more diverse, more globally competitive economy but also to do what’s responsible by our citizens by investing in the key social infrastructure.

“It’s incredible to think that in the next four years we’ll be spending nearly $8 billion on new and upgraded hospitals.

“We’re also investing more than $3 billion on new and upgraded schools, as well as skilled professionals needed to staff our schools and our hospitals.”

Ms Berejiklian said the NSW Government is well advanced on preparations for the biggest economic opportunity of all – the new Western Sydney Airport.

“The Western Sydney Airport will generate about $2 billion in economic value and more than 11,000 jobs in the construction phase alone,” she said.

“A development which when complete could ultimately generate 120,000 total jobs for the Greater Western Sydney region.

“In the coming weeks, I’ll be travelling to Japan and Korea promoting Western Sydney Airport amongst other things, and I’m sure the global interest will continue to increase.”

Ms Berejiklian said the government understood the pressures and challenges that come with rapid growth and the need to bring communities along with them.

“For every person who is excited by the change and sees an investment opportunity, there is someone else who finds that change confronting or even feels left behind,” she said.

“We need to appreciate that as we’re moving through at a great pace, every community feels they’re receiving their fair share but also that we’re addressing some of the challenges that do come from growth.”

Ms Berejiklian said NSW is a standout economy whether you’re comparing it to other states in Australia or the OECD nations.

“Our economy in its own right is bigger than 16 of those OECD nations individually, including places like Greece, Portugal and Ireland,” she said.

“We’re leading Australia on jobs, on growth, on investment, on infrastructure and now we are taking the state to the next level.

“We don’t want anyone in NSW to down tools, quite the contrary, we want everybody to assume the pace will only increase into the years ahead.”