The white elephants of NSW

Recent economic policy in NSW requires the nimbleness of musical chairs. One day everyone is in favour of neoliberalism and austerity, then they charge the minds and everyone adopts Keynesian big spending. As a result, billions of dollars have been wasted on projects that don’t stack up.

NSW Treasurer Mike Baird, later to become Premier, pulled a golden rabbit from his 2016 Budget hat – $3.8 BILLION on new, re-opened and renovated prisons. Even “string-‘em-up”, “law-’n’-order” and “flog ‘em” Coalition backbenchers were astonished. They went off to members’ bar to celebrate.

The desalination plant at Cronulla was another heart-stopper. Labor and the Liberals spent a total of $1.8 BILLION on this montrosity, almost twice the original estimate.

Have you ever drunk a glass of desal water? Probably not. The plant opened briefly during the long drought and then shut down again. This week NSW Treasurer Dominic Perrottet said he would flog it. It’s called corporate euthanasia.

The other big budget item was football stadiums at Parramatta, Penrith and Sydney’s Moore Park costing billions of dollars – all underwritten by public money. Taxpayers forked out the cash while football directors shared free drinks, food and tickets.

The initial budget for Sydney Football Stadium, to be torn and down replaced, was $720 million. Then it rose to $828 million and now with “weather delays and the pandemic” the cost has risen a shiver away from $1 BILLION.

In all three cases – prisons, desalination plant, and football stadiums – public money has been squandered on projects of dubious or uncertain value.

Let’s start with prisons. The number of inmates in NSW corrections facility is FALLING. The crime rate is DOWN. Responding to the fall in numbers, the Department of Corrective Services is closing facilities at Brewarrina and half a dozen other places.

In other words, NSW taxpayers have the bizarre situation of falling prison numbers and falling crime rates accompanied by a prison-building programme of historic proportions. Is this a colossal waste of public money or what? Who is to blame? When different sectors of the economy are crying out for money, wouldn’t it be sensible to hold a Royal Commission, or some form of public inquiry, into where the money went and who got it?

The new rationale for lavish spend is jobs, jobs, jobs. But on every major infrastructure project to date, costs have blown out without any commensurate increase in jobs: light rail, WestConnex, the Powerhouse project. How many more jobs at either of these projects? None. There are less jobs than before.

An efficient public service would be able to intervene to limit the overspend. But the public service has been emasculated by the mania for getting costs off the books, i.e. reducing staff and getting rid of valuable experience.

A case in point is light rail, an outstanding project which was implemented arrogantly, amid much secrecy and ultimately a disaster. If the Public Works Department hadn’t been abolished, someone might have been able to point out that Spanish contractor Acciona hadn’t been fully briefed about the underground power lines that caused the delay and the cost overrun.

It is conservatively estimated that 3,000 public service jobs have been lost in the current financial year. The result of the purge is that staff are so terrified of losing their own jobs that no one is giving independent advice. It’s the television comedy Utopia on steroids.

We now have a Department of Planning that has become the tool of Coalition politics, and an “Independent” [sic] Planning Commission that rubber-stamps Government-preferred projects.

With the budget in tatters as a result of the bushfires and COVID-19, the NSW Government has now announced a $3 billion “acceleration fund” for what Premier Berejiklian calls “shovel-ready” projects.

But the choice of projects makes no sense at all. Why abandon the ANZ Stadium rebuild, but go ahead with the demolition of the Powerhouse Museum in Ultimo and put up a completely unsuitable new building in Parramatta? It’s the wrong building for the Western Sydney city; it can’t house the museum’s collection; and it’s already known that the costs will blow out to at least $1.6 billion.

All the new Keynesian spend will going into the pockets, ahem, balance sheets, of private developers and big building companies. If jobs are the priority, create them in the public sector – more health workers, more teachers, more fire fighters etc etc.

You wouldn’t trust this lot to build your garden shed, let alone State significant infrastructure. NSW politicians are fond of saying “Money doesn’t grow on trees” and they’re right. Except when the money is ours.

Alex Mitchell is a former Sydney Sun-Herald State Political Editor whose commentary appears every Friday. His latest book is Murder in Melbourne – The Untold Story of Palestinian exchange student Aiia Maarsarwe. Available here.

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Alex Mitchell is a former Sydney Sun-Herald State Political Editor whose commentary appears every Friday. His latest book is Murder in Melbourne – The Untold Story of Palestinian exchange student Aiia Maasarwe.

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5 Responses to The white elephants of NSW

  1. Avatar Kylie Winkworth says:

    Thank you Alex. On the misnamed ‘move’ of the Powerhouse Museum, the business case says upfront ‘although not defined at its inception by unmet demand like similar large scale infrastructure projects, the project through the act of relocation ultimately begins to address the cultural demands of Western Sydney..’ on this flimsy basis the NSW Government is blowing up a 137 year old museum that has been in Ultimo since 1893. The real cultural demand in Parramatta is for an entirely different kind of museum on a different site, but the community is not allowed to chose what kind of museum it gets. They have to have the Powerhouse, in name if nothing else, because that is the government’s cover for selling the museum’s assets to developers. In 2015 the cost of this project was supposed to be $200m max. It is still on the drawing board and is already 700% over budget. The global cost of this world-beating cultural vandalism will be over $2b for a facility that is not even a museum. It is Carriageworks West, an arts and performance centre. Only the name of the Powerhouse is moving to Parramatta. The real Powerhouse will be buried under seventy storey blocks of flats.

  2. Avatar Ed Cory says:

    Richard Ure’s tale of rezoning reminds me of my time working in infrastructure, when a small para in the SMH flagged the NSWG’s intention to sell off land reserved for a transport corridor. A quick drafting exercise produced a short letter from his Commonwealth counterpart, suggesting in no uncertain terms that if it was sold, NSWG would never see any Commonwealth funding for that corridor. What part that letter played in preserving the land I know not – but it is now host to a piece of transport infrastructure.

    Such short-term thinking has blighted transport projects, and when forcing them underground, imposed immense costs on the community.

  3. Avatar Jocelyn Pixley says:

    Thanks Mr Mitchell. It’s an ugly story with many more cruelties and failures to add, as you say. Thanks for explaining the NSW prison closures while “Laura Norder” is included in the NSW Government’s every public statement.

  4. Avatar Dufa Wira says:

    Thanks Alex. The performance of the NSW Government over the past 20 years has been woeful. The lack of scrutiny is shameful. The combined effect of unwise privatisation and investment, and persistent public service capacity reduction, has left NSW poorer and less resilient. Wasteful spending on prisons, the desalination plant, stadiums and light rail are the tip of the iceberg.

    Other major failures include water management, energy management, environmental management, local government amalgamations, and neglect of local roads.

    These have all happened in the context of increased secrecy and security. We should be worried. There is work to be done.

  5. Avatar Richard Ure says:

    One of the least used lines in the Sydney suburban rail network, the former single track Clyde to Carlingford line, is to be duplicated to form part of Parramatta Light Rail stage 1. For the want of extending the line to Epping Station and thereby connecting it to the rest of the suburban and metro network thus justifying the duplication, under the current project, a passenger wishing to travel from Telopea to Macquarie University would take a tram to Carlingford station, a bus to Epping station and then a metro to the university, a journey of 8 km by road.

    The government is currently proposing to rezone land at Epping ideal for a light rail terminus for 430 apartments, basically preventing connecting these two parts of the rail network forever.

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