Victorious NSW Coalition finds ‘$4.5b budget black hole’ – an all-too familiar script

Shock horror! New NSW Premier Barry O'Farrell announces he's "discovered" a $4.5b budget "black hole" left by the former Keneally Labor government.


I was having a conversation about the likely outcome of the NSW elections on Radio Skidrow, a Sydney community radio station, just days before the March 26 election.

“We know what is going to happen after Barry O’Farrell wins the election, don’t we? He’ll wait a couple of weeks then he will announce that Labor has left the cupboard bare so they’ll have to bring in an emergency budget. Then there’ll be no more smiling, cuddly, “moderate” Barry. Out will come the big axe against public sectors jobs, public services… It is the standard incoming neoliberall government script.”

What I totally underestimated was how fast this script would be deployed.

Just a few hours after being sworn in by the Governor as the premier of NSW, O’Farrell announced that he had “discovered” (actually he got it from his first briefing by Treasury officials)a $4.5 billion “black hole” in the budget left by the former Keneally Labor government.

He accused the former government of ”cooking the books like never before” to hide the real budget situation, called for an emergency audit, and would not rule out public sector cuts after the results of the audit came in.

The alleged $4.5b budget black hole is actually the aggregate of new Treasury estimates of likely deficits over three financial years, 2012-2013, 2013-2014 and 2014-2015. The biggest of these newly projected deficits was $2.4b for 2014-2015 but, by budgetary convention, projections this far ahead are considered to be beyond scope of the forward estimates.

So the new O’Farrell government hasn’t discovered an actually-existing budget “black hole” or deficit (though the Treasury’s projections do confirm the absolute irresponsibilty of the privatisation agenda shared by the ALP and the Coalition – the disappearance of income from privatised assets like electricity, the state lotteries, will contribute significantly a future public income shortfall).

What has become a standard incoming neoliberal government script demands the discovery of a shocking financial deficit which will then be used to justify cuts to jobs and social services, tax cuts and subsidies to big business to help them “get the economy going”.

Remember the then inconvenient advice to O’Farrell from the infamous former Victorian Liberal premier, Jeff Kennett a month before the NSW election:

”Go fast early on,” Kennett advised, according to a report in the February 24 Sydney Morning Herald.

”The most important issue is not to try and address one issue on its own and then move to the next. If you do that all of those who oppose you will coalesce around one issue… If you attack all areas of government at the same time, you break your forces and each then settle down to protect their particular patch. You divide your enemy – old military tactic.”

For the ordinary people all this means: Brace for pain and pray for some trickle down from the boost to corporate profits!

If we buy this stale script after four decades of economic rationalism/neoliberalism, the GFC, etc, we are real suckers!

But now is not the time to agonise. It is time to start organising the resistance to the O’Farrell government’s impending attacks on our jobs, social services and rights.

One Comment to “Victorious NSW Coalition finds ‘$4.5b budget black hole’ – an all-too familiar script”

  1. Why believe Premier Barry O’Farrell able to deliver commitments meeting NSW $4.5 billion black hole not to explore a Health Olympic?
    Although Premier Barry O’Farrell has signed a contract to the people of NSW to deliver commitments, and that contract will be honoured.
    An honourable government is importantly to advancing the state, to create more opportunities for people to work on, and to ease the cost of their life that in happy to stay such state.
    Why a Health Olympic guarantee NSW back to number one state?
    • Inventing health improvement patterns;
    • Growing high antioxidant healthy grains and plants;
    • Manufacturing high antioxidant healthy grain powder products;
    • Exporting its health improvement knowledge and pattern; and
    • Exporting health improvement resources (including human resources).

    More detail linked to, or

    (Member of the Queensland Inventor Association since 1993).

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