Mike Baird is nothing if not game. His first budget as Premier is a
model of fiscal rectitude - which wins him high marks from people like
me, but makes this a most unusual budget for a politician facing an
election early next year he can no longer be certain of winning easily.
The
budget offers little in the way of tax breaks and few new spending
initiatives, save for more money on child protection, disability
services and homelessness.
Hardly a standard way to buy votes. The
cynical may see this as the reversal of earlier budget cuts that led to
political embarrassment, but I think I see signs of a more tender
conscience - another rare commodity in politics.
A fourth budget
of tight control on spending and steadfast revenue-raising cements the
new Treasurer Andrew Constance's claim to have got the budget back on
track and heading steadily into the land of surplus. If voters are
looking for good managers of the state's finances, this lot is the best
we've seen in a long time.
Of course, Baird is promising to spend
big on a new hospital, highway or rail link near you. That's sounding
more like pre-election vote gathering. But even here he's not planning
to do anything that could possibly endanger the state's much-prized AAA
credit rating.
As his opponents will lose no time in reminding anyone
who has forgotten, almost all the goodies he's promising are dependent
on him raising the money by partially privatising the state's
electricity distribution businesses - a proposal the electorate has so
far found utterly unattractive.
It's also a proposal that caused
bitter division within the previous Labor government. It led to the
demise of a premier and a treasurer, and was ultimately the greatest
single contributor to Labor's ignominious defeat in 2011.
The
election next March is shaping as a referendum on electricity
privatisation which Labor, freed from the obligations of office, will
vehemently and gleefully oppose with blood-curdling predictions about
how power prices would rise.
This time, however, Baird has upped
the stakes by giving all of us something to lose in the way of improved
infrastructure. If you want all those goodies you have to vote for him,
not the other lot. But if we vote him back, the privatisation comes too.
He's nothing if not game.
It would be nice to say Baird's
budgetary virtue had been rewarded by a much-improved outlook for the
NSW economy. But state budgets don't have much influence over state
economies.
Sometimes, however, the virtuous can have good luck.
And Baird's luck is looking fine. With the mining investment boom
ending, there has been a changing of the guard between the states. As
Western Australia falls back, NSW takes the lead.
The whole of
federal macro-economic policy is directed at encouraging growth in the
non-mining economy and the non-boom states, making NSW a prime
beneficiary.
The Reserve Bank is holding interest rates
exceptionally low to encourage borrowing and spending, particularly on
housing, and NSW is Exhibit A to show it's working. Baird's budget is
getting its cut, with collections from the tax on property conveyancing
now very high.
After a long period of below-average growth, the
NSW economy is already growing faster than the national average and this
seems likely to continue for at least another few years. That means
better growth in employment and lower unemployment. Not a bad time to
have an election.
