A significant portion of the $20 billion Labor plans to spend on infrastructure if it wins the upcoming election in NSW is for rail projects, and the source of that infrastructure funding has caused the most heated debate so far in the parties’ respective campaigns.
Funding for the proposed second rail crossing for Sydney Harbour could be on the line at the polling booths in 17 days’ time.
The NSW Liberal Party is proposing a $20 billion infrastructure spending plan, while Labor is proposing a much more modest $10 billion plan.
Both proposals include roughly $600 million in funding for the Parramatta light rail network.
But only the Liberal Party has promised to contribute $7 billion for the construction of Sydney Rapid Transit – the project which will see the extension of the work being done for the North West Rail Link, to build an underground Sydney Harbour crossing, thus doubling the existing infrastructure between Chatswood and the CBD.
The odd thing is that that massive project is receiving little attention throughout the debate.
The aspect of this story that’s causing the biggest stir is just where the Liberals propose they earn the extra $10 billion in funding that Labor hasn’t budgeted.
Liberal leader and NSW premier Mike Baird announced on Monday that the party, if re-elected, will sell off 49% of the remaining state-owned electricity assets (the ‘poles and wires’).
Evidence in Victoria and South Australia has suggested that electricity privatisation can reduce prices, and Baird says the sale will raise billions for a state-wide infrastructure plan.
The premier is guaranteeing cheaper prices, saying on March 8 that bidders for the lease will have to guarantee cheaper supply. Former ACCC chair Allan Fels would take on the role of electricity price commissioner in the scheme, to ensure that price gouging did not occur, Baird said.
“I make this pledge – unless the bidders guarantee lower prices, and Allan Fels signs off on it, these transactions will not go ahead,” Baird said.
“We’ve got power prices back under control, after they rose by about 60 per cent over five years under NSW Labor.
“This price guarantee, and the appointment of Professor Fels to oversee it, is our contract with the people of NSW that network prices will not rise as a result of our plan.”
The move by Baird is a bold one. Privatisation plans were blamed for a shock election loss in Queensland recently, and NSW Labor is looking to see the same happen south of the border.
Labor, which is promising a much more modest infrastructure spending plan, is against privatisation. Shadow treasurer Michael Daley has been a key opponent of Baird’s plan, warning retailers will be allowed to charge “whatever they want” once they own the assets.
His colleague, opposition leader Luke Foley, has said a newly-elected NSW Labor would provide for the people of NSW without “blackmailing” them with electricity privatisation.
Launching his campaign for hospital and other spending on the Central Coast on March 9, Foley responded to Baird’s plan, saying “we will never make hospital upgrades contingent on privatising electricity.”
Labor is taking advantage of public sentiment: A recent ABC poll found the majority of voters are against electricity privatisation.
Labor said in its infrastructure plan: “Once our electricity network is sold and the money is spent – it is gone forever. This means that the profits from our state-owned companies, generated through dividends and tax equivalent payments, will also be lost.”