The Guardian May 31, 2000

Olympic debts gut NSW budget surplus

by Peter Mac

NSW Labor Treasurer Michael Egan has achieved a surplus of $380 million in 
this year's State budget, despite workers having prevented him from selling 
off the State's electricity industry last year.

Nevertheless, all is not rosy in the Treasurer's garden. Housing 
construction in NSW, as in other states, is expected to experience a sharp 
downturn as prospective home owners struggle to cope with the massive 
impact of the GST. 

The Egan budget has included a substantial cut in stamp duty for first home 
buyers, in order to stave off the housing slump.

The budget also includes a cut in payroll tax, in the hope of stimulating 
the economy, something that employers have been calling for for some time. 
However, big business representatives received this generosity with their 
usual surly ingratitude. The State's shadow Treasurer, Peter Debnam, 
equated such handouts to business with improvements in the State's economic 
competitiveness, declaring that the payroll tax reduction should have been 
seven times greater, and stamp duties abolished altogether!

The biggest problem confronting NSW however, is the Sydney Olympics which 
have already swallowed billions of taxpayer dollars.

$100 million blowout

It is now expected that the Olympics bill will rise by the best part of 
$100 million. This staggering overrun has been attributed in part to the 
loss of lucrative sponsorship deals, even though alternative arrangements 
have now been made with some other sponsors. (As a consequence we will 
doubtless again witness contestants acting as advertisements for various 
companies throughout the Games.)

The NSW Government has also announced cost increases of $10 million for 
contract security and police services, and $18 million for transport 
although rail workers are unlikely to see any of that! (See other Olympic 
story page 1).

There is a massive $33 million extra going to the Olympic Coordination 
Authority for organising construction and venue fitouts. 

$100 million must now be found to prop up this monolithic event. "No 
worries!" says Treasurer Egan, who has decreed that the $30 million the 
Games was supposed to yield for the people of NSW will now be used to meet 
part of the extra costs. Now you see it, now you don't! Egan declared that 
he could "handle any slide over expenditure" by allocations from the cash 
surplus and contingency funds. Good news for Olympics contractors, but bad 
news indeed for the hard-pressed people of NSW.

Back to index page