Hunter chips in $20bn to privatisation push

THE Hunter has contributed more than $20 billion to the state’s coffers through the sale of publicly-owned entities over almost three decades, a new analysis reveals.

Since it was elected in 2011 the NSW governments – led by Barry O’Farrell, Mike Baird and now Gladys Berejiklian – have overseen the sale of about $50 billion worth of assets across the state, including the $1.75 billion sale of the Port of Newcastle, and the $1.5 billion sale of the Bayswater and Liddell power stations.

But according to a new report released by the NSW Parliamentary Library, the Hunter has been helping fill the state’s coffers for nearly 30 years.

Starting with the sale of the Kooragang Coal Loader for $20.2 million in 1990, the Hunter has made up the whole or part of about $21.7 billion in asset sales, including some assets – like the sale of FreightCorp to Pacific National for $669 million in 2002 – that were only partially Hunter based.

While the government says asset sales – like the long-term lease of poles and wires that Mr Baird took to the 2015 election – help fund major infrastructure projects and grow the state’s economy, the shadow minister for finance and Cessnock MP Clayton Barr argues that about 20 per cent of the state’s assets have been “stripped” from the economy since 2011, leaving a hole in the government’s income. 

“What has been happening is that all the assets that make a profit are being sold off so that eventually the state government is left with no income stream except the pocket of the taxpayer,” he said. “Given the ever-increasing cost of providing for health, educational, police, those sorts of services we expect, we are going to be left in a situation where the only place we can turn to for the money we will require is the pocket of the taxpayer.”

But the parliamentary secretary for the Hunter, Scot MacDonald, said the government still recouped revenue from land taxes and stamp duties, He said Mr Barr’s argument ignored the “retained value” of an asset.

“In any analysis you look forward and try to work out dividends into future years and come up with the retained value ... it’s a straight numerical value of whether it’s in the long-term best interest of the taxpayer to hold onto that asset or not,” he said. “The other thing is that many of those assets like the Port of Newcastle are mature, so generally they need more investment to keep them efficient and up to date.

“In the Hunter people proselytised doom and gloom when the Port was leased but I don’t hear that very often anymore.”

Greens MP Justin Field said the asset sales were providing only a “once-off sugar hit of funds”.

The Treasury spokesman said the sales would not result “in long-term benefits or better services for the NSW community”.

The head of the ACCC, Rod Sims, has previously been critical of asset sales like the Port of Newcastle.

Last year he said he was “almost at the point of opposing privatisation” because state and federal governments were becoming increasingly blatant about structuring sales to maximise proceeds at the expense of competition.

Mr Field seized on those comments on Monday, saying the broader public “knows the end result is a push for profits, often with reduced services and high costs”.