[Greens-Media] NSW mini-budget strategy rubbished by Reserve Bank

[John Kaye]

NSW mini-budget strategy rubbished by Reserve Bank
 
Media Release: 20 November 2008
 
NSW Treasurer Eric Roozendaal's mini-budget is looking even less
defensible now that Reserve Bank Governor Glenn Stevens has given the
green light to government debt for important infrastructure projects,
according to Greens NSW MP John Kaye.
 
Dr Kaye said: "The NSW government's fixation on its AAA credit rating
and its slashing of important infrastructure projects to curtail debt
have lost whatever credibility they might have had.
 
"Mr Stevens made it clear that projects that were sensible a year ago
should go ahead, even if they drive governments into debt.
 
"The ‘deferred' rail links to Sydney's North-West and the delayed South
West rail project would have gone ahead under the Reserve bank's test.
 
"Instead they were cut in a budget that is designed purely to appease
the rating agencies.
 
"The people of NSW are being condemned to a longer and deeper economic
downturn, and a range of other unnecessary and painful measures,
including the School Student Transport co-payment.
 
"In Budget Estimates this week, Deputy Treasury Secretary Mark
Ronsisvalle admitted that the interest rate savings to the state budget
from maintaining the AAA credit rating would be swamped in an
environment of falling official interest rates.  
 
"While a downgrading from AAA would increase the state's interest bills
by 0.25 per cent, official rates have fallen by eight times that amount
since early September and are predicted to decline even further.
 
"Any costs of losing the AAA rating would rapidly be absorbed in a
climate of falling interest rates
 
"The futility of appeasing the rating agencies is clear to everyone
except the NSW Treasurer.
 
"It is time economic policy in this state was driven by the long term
needs of NSW, not the whim of discredited rating agencies," Dr Kaye
said. 
 
For more information: John Kaye 0407 195 455 
 
 
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John Kaye
Greens member of the NSW Parliament
phone: (02) 9230 2668
fax: (02) 9230 2586
mobile: 0407 195 455
email: john.kaye at parliament.nsw.gov.au
web: www.johnkaye.org.au
 
mail: Parliament House, Macquarie St, Sydney NSW 2000