Assets up for sale to fund NSW’s road from COVID recovery
It was about mid-February when NSW Treasurer Dominic Perrottet began to feel nervous.
A mysterious, vaccine-less virus that had effectively shut down a populous city in China had made it to Australia.
For weeks the public - and Treasurer Dominic Perrottet - had been focused on the bushfires.
The economic impact from the "Black Summer" fires, together with the drought that preceded them, was already going to be bad.
But within a month, everything was to get worse - a whole lot worse.
"Very early on, when the virus hit, I knew the impact it would have. That was not lost on me," he said
"But by the 22nd March, when the restrictions were put in place, that was when the gravity really hit. I knew we were going to be in for a challenging time."
Days quickly blurred in to weeks. Plans would go out of a date by the time they were announced.
If the public had a sense the government was flying-by-the-seat-of-its-pants, it was.
With no "book on the shelf" on how to deal with the rapidly emerging crisis, Perrottet hit the phones.
"Every hour of every day, I just spoke to businesses - right across the board - trying to determine what the impact was," he said.
"It felt like the ground was moving very, very quickly.
"The days were flying. There is not book on shelf on how to deal with a pandemic. I would spend, early on, all week on the phone, calling everyone we had on our lists - industry groups, my own business council that I had in place, banks, economists, airlines, accommodation, restaurants and pubs and clubs to just determine what the impact was so we could very quickly put together packages of support.
"This was not the time for departmental studies in relation to mounting a response. We had to learn what we needed from the coalface. Our responses were based on what we were hearing on the ground. What was needed at the coalface."
It was tiring - "we were working ridiculously long hours" - and there were times when the weight of responsibility was simply "daunting", he said.
"When you sit there talking to them and you realise that they were preparing to lay off many, many staff, the gravity of the situation and the weight of responsibility was pretty daunting," he said.
"When we did the first stimulus package, I thought it was out of date within 48 hours. I remember thinking, this is now out of date. But what was really positive was how many people were happy to lend their advice, offer their opinions."
The one that resonated most was by economist Chris Richardson who told Perrottet: "Don't
let perfection be the enemy of the good."
"He was basically saying, you have to move fast and you might make mistakes but that's okay - you've just got to get things moving quickly," he said.
This was the period between February and March.
Eight months on and NSW appears to be through the worst of the health crisis.
But Perrottet warns next year will have its own challenges as the state goes into a recovery phase along with the expected phasing out of JobSeeker.
As for the multi-billion deficit, Mr Perrottet said it had gone from single to double digits. It is understood it will be between $10 and $20 billion.
"This next year will be a very difficult year for this state," he said.
"We've got to transition people from programs such as Jobseeker into paid wages. As hard and as difficult as this year was, the challenges are not going to go away. They might be different but it's going be a difficult period of time."
However Perrottet believes the NSW government's "strong fiscal management" and decision-making had put NSW on a pathway to recovery.
In September, a task force was set up to review the spending of every department with government-funded programs and initiatives that did not drive jobs, productivity or economic growth to face the chop.
The government has also confirmed it will sell the remaining stake in the WestConnex motorway as part of an expansion of asset sales.
It can also be revealed the government will be slashing its use of consultants, undertaking less travel and seeking out better deals for things such ass fleet and information and communications technology.
Government sources have speculated about the introduction of greater departmental efficiency dividends and cuts to middle management as other potential areas of savings, along with offloading billions of dollars of surplus government land.
There has also been talk about changes to council rates, land tax and developer contributions - the latter being the subject of a NSW Productivity Commission report which is due to be handed to Planning Minister Rob Stokes on November 24.
Perrottet says the Budget will "lay the groundwork" for the changes once the report is finalised.
"Planning reform is the key focus of our government and going forward, it will be a driver of our economic growth," he said.
"The Productivity Commission is finalising a report into contributions reform and that is due to be finalised in coming weeks. The Budget will lay the groundwork for the reform."
Not all the decisions - such as a 1.5 per cent public sector pay rises cap - have been popular.
Perrottet argues it is about keeping as many people in jobs as possible.
"It is about being fiscally responsible for the times that we face, particularly when in the private sector we are losing jobs," he said.
However, Perrottet says the theme of the Budget won't be cuts.
"This is not a slash and burn budget," he said.
"This is a budget to stimulate the economy and to provide a strategy for our economic recovery and reform.
"It's also has a focus on keeping people in jobs - keeping as well as creating jobs. We are really focused on delivering a budget with a dual horizon - not just for here and now, but also setting up for the future.
"We have got to keep investing in services and investing in people to get on with the recovery and reform that will set up our state for the next generation."
This included the Government taking advantage of the current environment to issue bonds at historically low cost to support investment into "city-shaping infrastructure" without saddling future generations with debt, he said
"There continues to be very strong and healthy investor demand for our bonds," he said.
Borrowing costs had also plunged from around six per cent a decade ago to "close to one per cent today".
"That provides a great opportunity for us," he said.
Perrottet reveals he has sought advice from both former prime minister John Howard - whom he speaks with regularly - and Paul Keating on the economic road ahead: "Now that the dust is settling and we are aware of the economic challenges our state faces."
He agrees there have been lessons learned and not everything has been a negative, such as the reams of red-tape that were able to be magically removed for initiatives such as open-air dining to boost hospitality business.
"It's a great thing and has given business the opportunity to flourish," he says.
There has also been significant investment in the health system. At the height of the pandemic, Perrottet says he told Health NSW they would get "whatever they needed".
On a personal front, it has reinforced the important of family and faith, which he says "keeps me grounded".
"Honestly, it's been a difficult year on both the work and home front," Perrottet says.
"Having said that, I think it's having gone through this time that given me a much greater appreciation at what matters in life and how important family is.
"I've learned a lot from my family and also speaking to others. A lot of this comes through in the Budget."
Perrottet, who has six children, revealed it was his wife Helen who informed him of a condition some mothers experienced during pregnancy called hyperemesis gravidarum, or extreme morning sickness, which - after some investigating - uncovered a need for increased research and opportunities for home care instead of hospitalisation.
As revealed in last week's Saturday Daily Telegraph, the Budget will include a $17 million investment in the disease.
"I didn't know anything about it until my wife raised it with me," he said. "There are some things the media don't think are important but this one initiative has had the biggest response.
"I've had messages through social media, emails - by far it has had one of the biggest responses from the community."
As Australia awaited a coronavirus vaccine, Mr Perrottet said it was important the virus "did not control our lives".
"As hard as this has been for us, where we sit today is a much better place than in February," he said.
"The public has been instrumental in coming along the journey and coming along in our economic recovery. Look at the business COVID plans, which have been instrumental in enabling us to open up.
"That has been our success. You get in to public life to leave the state in a better place that you found it. The fragility of that obligation is very true today."
Originally published as Assets up for sale to fund NSW's road from COVID recovery