[Greens-Media] Recession threat means Rees should invest in NSW's future

[John Kaye]

Recession threat means Rees should invest in NSW's future

Media Release: 7 October 2008

The threat of a recession from the turmoil sweeping western financial markets means NSW should be increasing rather than cutting spending on services and infrastructure, according to Greens NSW MP John Kaye.

Dr Kaye said: "NSW households will suffer if the Rees government is panicked into cutting the investment needed to future-proof the state's economy.

"It is perfectly sound economics for the government to borrow in the face of a cyclical downturn in the property market.

"The shortfall in state revenues has been touted as a reason for the belt-tightening mini-budget scheduled to be handed down on November 11.

"The Rees government has been arguing for a cut back on infrastructure spending to keep the credit ratings agencies happy.

"NSW faces the real threat of slipping into recession with the state recording negative growth during the June quarter and the world's financial markets under considerable stress.

"This is exactly the time when governments should be borrowing and spending in order to boost the economy.

"Taking an axe to public services like health, education and transport will prolong the downturn and make life harder for NSW's households.

"Cutting infrastructure spending will cripple NSW's economy in the next decade.

"Much of the blame for the revenue shortfall has been laid at the feet of a downturn in receipts from property tax revenues.

"This revenue stream is directly related to the state's property market which is cyclical by nature.

"The property market will bounce back sooner if Treasurer Eric Roozendaal's mini-budget doesn't make the situation worse.

"The Rees government should not be panicked into a mini-budget that takes the axe to the NSW economy," 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