A collection of Michael Egan letters to media outlets suggest that maybe he really does have something dodgy to hide. But you’ll have a good belly laugh at some of these – does he do anything else apart from write searing letters?

The last few days have been no exception with the Sydney Morning Herald’s Robert Wainwright copping an awful bollocking for daring to suggest the government would have to jack up water prices to pay for a $1 billion raid on Sydney Water to prop up the budget.

The most vociferous complainants are usually those with the most to hide and we suspect this to be the case with Egan and his house of cards budget.

A Macquarie Street insider faxed Crikey an extraordinary flyer that Egan has distributed to MPs pouring water all over Wainwright’s stories.

There are little arrows pointing to each paragraph with lines like: “Write a sensational opening paragraph including an unequivocal declaration that this horror will happen” and “Give the Opposition not one, but two opportunities to comment.”

Our spy’s cover note read as follows:

“Dear Criksters, ego Egan is proudly passing this to MPs today. Thinks himself even more extraordinarily intelligent than usual. Has no idea that it will be seen as an over-reaction by a paranoid spin-meister. Wainwirght was not given a copy but will get one soon.

Do ya Best!

Macquarie Street Mouse”

And this is the letter Egan sent to the SMH bollocking the story:

Dear Editor,

Oh dear. Robert Wainwright has taken your newspaper to new tabloid depths with today’s shock-horror beat-up about alleged ‘huge water bill increases’.

It reads like a beauty.

There’s only one problem. It’s wrong.

I suspect Robert knew that because during a 14 minute telephone interview with me last night, in which I tried to explain Sydney Water’s dividends and borrowings, he never once raised the prospect of ‘huge water bill increases’.

If he’d asked me, I would have ruled out any link between Sydney Water’s payments to the Government and prices.

And I’m not just relying on memory. I taped my end of the conversation.

Naughty, naughty, Robert. You knew the facts would have killed your story so you didn’t ask me.

These facts are that Sydney Water charges are set by the Independent Pricing and Regulatory Tribunal once every few years. The Tribunal would not allow any price rise linked to Sydney Water’s dividend to the Government.

Sydney Water’s current price arrangement with IPART will see a price increase less than CPI in 2002-03. And Sydney Water tells me they won’t be seeking anything above inflation increases in the subsequent price determination.

All Robert Wainwright had to do was ask me and I would have told him this.

Michael Egan

NSW Treasurer

The cross-bench MPs have received a blitz from Egan’s staff and have never seen a reaction quite like it.

And can you imagine if a journo admitted they had secretly taped a conversation. Very unethical.

Egan hides in accounting obfuscation that only treasury officials can understand when he has an obligation to explain the budget publicly in a manner which is both frank and understood by the ordinary taxpayer.

He is happy to use public trading enterprise figures together with general government sector figures when announcing how much they are spending, but only refers to budget sector figures when discussing debt. And we haven’t even touched unfunded superannuation liabilities.

He also can’t read. Sydney Water chairman Gabrielle Kibble, in a letter to Egan he claims he never saw, directly linked dividend demands to future price increases (2005-6 and beyond)

Suffice to say it all smacks of a politician who is unusually defensive about his cherished budget. Must have something to hide.

The Wainwright follow-up

Robert Wainwright followed up the following day with a front page story pointing out how debt has spiralled in government-owned businesses because Egan has been raiding them for excessive dividends to prop up his budget. This sparked another explosion from Egan as follows:

Dear Editor

Your front page story by Robert Wainwright on 15 June asserted that state-owned businesses are being forced to borrow in part to meet demands for government dividends.

This is wrong. Dividends come from the businesses’ profits not from their income earning borrowings. No profits, no dividends.

Businesses will borrow around 20 per cent of the $3 billion-plus a year they are spending on new electricity networks, water system, rail track and other capital works.

But you don’t have to believe me. It its 5 June media release the rating agency Standard and Poors said government businesses were “ramping up (their) capital expenditure program to about $3 billion – $3.5 billion in the next four years.”

It went on: “the public sector is unlikely to be able to fund this increased spending internally and so the state is projecting net lending requirements (borrowings) of more than $1 billion a year in the next three years.”

On the rise in income earning borrowings Standard and Poors said: “the state’s finances are in such a strong position that it can easily afford such an increase now.”

So there you have it. Borrowing for income earning investment, not for dividends.

Your story also asserted that I did not detail in my Budget comments that debt in government businesses is set to rise over the next four years.

Mr Wainwright obviously did not read the Budget papers or listen to my Budget speech.

I count more than a dozen substantial references to rising business debt in the major Budget papers, and five yes, five tables showing rising debt to partly fund income earning investments.

In my speech I said: “government businesses will undertake $3.3 bnillion of new income earning investmentsfinanced approximately 80 per cent by grants and the businesses’ own cash flows and financial assets and 20 per cent from commercial borrowings.”

Yours sincerely

Michael Egan ends

The fact remains that NSW has the highest taxes in the country, has starved capital works, can’t afford to fund new roads, introduced 30,000 new poker machines, raided its public authorities and still struggles to balance its budget because the Carr Labor government is the most reckless outfit in the country. Recurrent spending has risen more than 60 per cent since they took office and grown at twice the pace of the economy.

They are starting to look like Victoria’s Cain and Kirner regime which did enormous damage to public finances and the community.

Egan’s aggressive letters

Now let’s have a look at some of the other feisty letters that Michael Egan has sent over the years, including a couple to Crikey’s editor when he ran the Daily Telegraph’s business section.

Codswallop from Tony Harris

AFR, 12 September 2000

Dear Tony

I’ve just read your article “Games silence not golden”.

What a lot of self-serving codswallop!

The truth is I wasn’t trying to shame the Herald from doing anything.

I was asked a question by a Telegraph journalist and then subsequently by Fred Nile.

I gave my honest, longstanding opinion about the Herald and the Fairfax press, and my honest opinion about an appalling creation of fake news.

I feel sympathy for the photographer involved. He was simply the victim of the Herald/Fairfax culture, an evil culture that long ago abandoned attempts at objectivity, accuracy and quality control.

Cynicism and negativity are not just the dominant ethos of the Fairfax stable. I am more and more certain that they are also part of a deliberate commercial strategy to carve out a niche in the readership market. I’m sure however, it will fail, as I strongly suspect that Fairfax is unable to understand or interpret its own market research.

I used to loathe the Fairfax media because it was always ultra conservative and anti-Labor. In more recent years, my reaction has been motivated more by its appalling quality (with some notable exceptions) and amoral standards.

Whenever I hear of some bright-eyed, idealistic young journalist going to work at Fairfax, the injunction I heard often from the Christian Brothers comes to mind: “Always avoid the occasion of sin”.

I could list example after example of the sins of Fairfax, but a recent anti-Semitic piece in your paper will suffice. I always like to give the benefit of the doubt and therefore assume that anti-Semitism was not the intent of the journalist, or anyone else for that matter. But surely there should be some greater quality control and awareness in a major national newspaper.

I am nevertheless, looking forward to my day as a Fairfax guest at the Olympics “sailing close to the wind” as the Herald reported my acceptance of their invitation.

I also believe in the power of redemption, and hope for mine as well as Fairfax’s.

Yours sincerely

Michael Egan

Tony Harris the Democrat

AFR, 2 May, 2001

Dear Editor

I suspect that Tony Harris is a Democrat, but he is certainly no democrat.

His article (Act no guide for Costello, AFR 1 May) highlights the central tenet of Harris’ thinking in both his previous public role as New South Wales Auditor-General and in his present role as a Fairfax cadet journalist.

Mr Harris believes there are “right decisions” and “wrong decisions”. Right decisions are generally made by unelected officials or judges according to a prescribed formula. Wrong decisions are generally made by politicians, especially those who are members of an executive government appointed under the principles of Westminster democracy, and particularly when it is suspected that a decision is influenced by a politician’s sense of the popular will.

Whatever one might think about Peter Costello’s decision on the Woodside matter, Costello and his Government will be answerable to the electorate for it.

Mr Harris would rather have a system where elected decision makers, or preferably unelected decision makers, were “obliged to make the right decision”.

The fact that he seems to believe there is always a “right decision” might qualify him to become Pope, but it also shows that he has no appreciation that in a democratic polity people are entitled to insist on what Mr Harris might consider a wrong decision.

It has always seemed to me that Mr Harris loathes the very concept of an elected executive government able to exercise any judgement or discretion. He much prefers a country to be run by anarchistic legislatures (ie, those in which no party or grouping has a majority) and unelected technocracies.

He should never have accepted the position of New South Wales Auditor-General without having first read and understood The English Constitution by Walter Bagehot.

Yours sincerely

Michael Egan

Read my Budget speech you goon

Daily Telegraph, 30 May, 2001

Dear Sir

Regarding your editorial comment today entitled An ideal opportunity squandered, I really have to ask the question: did your writer actually read my Budget speech, delivered yesterday?

Your newspaper’s assertion that “there was no relief for business” has been comprehensively contradicted by leading business groups.

The Business Council of Australia welcomed “the significant investment in infrastructure and people, the early phased removal of the debits tax and the abolition of the $100 million a year levy on electricity suppliers.”

The Australian Industry Group said: “This is a sound strategy for building industry confidence and generating economic growth over the coming twelve months.”

It also commended the Government for “finding scope to support industry through tax reductions, particularly the abolition of Bank Debits Tax, stamp duty threshold changes and suspension of the Electricity Distributors Levy.”

The Real Estate Institute welcomed the stamp duty relief and said the debits tax abolition would reduce “the overall tax burden from the already overburdened small business sector.”

The State Chamber of Commerce said that the schools maintenance and construction program “should stimulate work for small and medium sized businesses.”

The Credit Union Services Corporation said “credit unions applaud removal of debits tax” and called on other States to “follow NSW’s lead.”

The managing director of the Commonwealth Bank described the Budget as “further good news” for its NSW customers, saying the abolition of debits tax would save them around $60 million a year.

I ask again: just where was your leader writer yesterday?

Michael Egan

Business surveys a load of bumpkin

AFR, 15 January, 2001

Dear Editor

I am always dubious about the value of surveys of business confidence or expectations.

Over the last decade Australia has experienced remarkable economic growth, completely at odds with the mainly pessimistic expectations revealed by such surveys over that period.

Nevertheless, if the media is to place any significance on them, it is important that they be accurately and competently reported.

Lisa Allen’s report “Olympics can’t save business from hitting a four year low” (Fin Review 19 January) was neither accurate nor competent.

The St George Bank/State Chamber of Commerce December Quarter Survey of Business Expectations did not report a 34 per cent drop in business activity in the December quarter.

It reported instead that 66 per cent of the 366 businesses it surveyed expected either no change or an improvement in business activity, compared to 34 per cent who expected a decline.

I would like Ms Allen to explain how this translates into her ludicrous claim that business activity has fallen 34 per cent.

Just for interest, Ms Allen might like to know that the Australian Bureau of Statistics latest available figures for private sector capital investment (Sept Qtr 2000) in N.S.W. were an all-time high of $4,166 million, 5.3 per cent higher than the June quarter and 19.2 per cent higher than the previous September quarter.

Yours sincerely

Michael Egan

Lisa Allen misleads and distorts

AFR, 27 August, 2001

Dear Editor,

I write in response to the misleading and inaccurate article by Lisa Allen on 27 August, regarding the NSW biotechnology industry.

Firstly, there was no analysis of what exactly constitutes the funds supposedly pledged by Victoria and Queensland and whether those States’ definition of ‘biotechnology’ equates to that used by New South Wales.

Secondly, your writer reported that the Deloitte Touche Tohmatsu biotech index shows just 13 biotech companies in NSW. Ms Allen omitted the important fact that the index covers listed companies only.

In fact, in the report by Dr Mark Bradley from which Ms Allen quotes so selectively, the number of biotech companies in NSW was stated as 44 out of a national total of 101.

Thirdly, Ms Allen reports that “NSW was represented by six individuals” at a biotech conference in San Diego in June.

Wrong. I am advised that 56 (that’s fifty six) individuals from NSW biotechnology companies, research institutions, financial and legal organisations attended Bio2001.

Fourthly, Ms Allen reports that “the NSW Government says” that this State is home to 40 per cent of Australia’s biotech, pharmaceutical and medical device companies.

Wrong. It was the Commonwealth Government, in its Australian Biotechnology Annual Report 2001, which reported that NSW has 40 per cent of biotech and related companies. Ms Allen knew this. My staff had informed her, in writing, of the report and its findings.

I repeat, this article was misleading and distorted.

Michael Egan

I am not an animal, I am not driven by hate

AFR, 1 June, 2001

Dear Editor

In an otherwise flattering article (Hope grows from hate in the garden of Egan, AFR 1 June), Lisa Allen says that before my Budget press conference I “reminded journalists that what drives me in politics is (my) ability to hate.”

What I actually said was “I am one of those people who always has a hate of the moment. It sustains me, it keeps the adrenalin flowing. And at the moment I actually have two.” I then went on to criticise two journalists (one of whom is now back in my good books) for, in my opinion, stupid and inaccurate things they had written.

I don’t think this is quite the same thing as saying that I am driven by hate. At least I hope not.

Yours sincerely

Michael Egan

Serious sins of omission

SMH, 29 May 2001

Dear Editor,

There are sins of commission and sins of omission.

With today’s front page story about NSW job growth, the Herald is guilty of a serious sin of omission: counting only the full time jobs that have been created in NSW since March 1999, and omitting entirely the 797,000 people in part-time work.

Once the part-time jobs are counted as well, the total working population in NSW last month was 3.07 million, an increase of 161,000 on March 1999.

The Government is on track to achieve its target of 200,000 new jobs by March 2003.

Perhaps the thousands of Herald readers in part-time employment would be surprised to know that they have been relegated to the status of non-person.

Yours sincerely

Michael Egan

Adele Horin’s drivel

SMH, 10 December, 2001

Dear Sir

Adele Horin (The New Power to Choose, SMH 8 December) is needlessly worrying herself.

When, from January next, households are given the choice to choose their electricity retailer, they’ll also be given another choice the right not to choose.

Those who choose not to choose probably about 95 per cent of customers will need to do nothing.

Their choice will be a passive one. They will simply continue to purchase from their existing supplier under a tariff regulated, as it is now, by the Independent Pricing and Regulatory Tribunal.

All Adele will need to worry about is what sort of drivel she’ll write about in her next column.

Michael Egan

What South Australian biotech industry

The Bulletin, 22 January, 2002

Dear Sir,

In your magazine today, writer Tony Wright declares that ‘South Australia has the bulk of Australia’s biotech companies’.

He offers no evidence to support this. That’s because there is none. His assertion is breathtakingly wrong.

The truth is that in biotechnology, New South Wales is way ahead of the pack.

The Federal Government Biotechnology Report 2001, prepared by Ernst and Young, reports that NSW is the base for 40 per cent of all biotechnology and pharmaceutical companies in Australia.

Just eight per cent are based in South Australia, way behind Victoria (32pc) and Queensland (11pc).

The same report finds that NSW has 30 per cent of ‘core biotechnology’ companies (excluding medical device and pharmaceutical companies). South Australia has 8 per cent.

New South Wales is also the focus of investment by multinational pharmaceutical companies in Australia, with 80 per cent of them based in Sydney and 70 per cent setting up their regional headquarters in Sydney.

While I have to admire your gritty determination to run something upbeat about South Australia, the reality is: New South Wales ‘has the bulk of Australia’s biotech companies’.

Michael Egan

Mum, I’m no electricity industry rigger

The Bulletin, 4 February, 2002

Dear Editor

Gee whiz, I am so clever!

According to Ivor Ries, single-handedly I’ve rigged the national electricity market, starved Victoria and South Australia of much needed power, driven wholesale power prices $20 per megawatt hour dearer and am about to send Victorian power retailers broke.

If Mr Ries were right, I’m sure my mum would be very impressed. But alas, he’s wrong.

To start with, I have never “forced”, directly or indirectly, any of the New South Wales generators to remove capacity from the national grid.

The decision of individual generators, whether owned by NSW taxpayers or private shareholders, to bid into the market at any given price is a commercial decision for each generator.

Indeed, far from trying to restrict capacity in the national grid, New South Wales is the only jurisdiction in Australia to have consistently sought to expand it.

For example, we have supported every single proposal for augmented or new interconnectors.

If these interconnectors had been approved and installed in a timely fashion, Victoria and especially South Australia would have avoided their current problems of limited supply and high prices.

Mr Ries also attacks the New South Wales Government’s decisions to establish ETEF and to examine the contracting out of electricity trading. He makes the false assumption that these measures will hold small customers captive to power prices set by the government.

If he had done his homework more thoroughly he would know that all small customers in New South Wales now have a choice. They can choose to remain regulated customers at a price set by the Independent Pricing and Regulatory Tribunal or they can choose to buy their power from any retailer of their choice.

It appears that Mr Ries would deprive them of this choice. If not, then surely he would accept the sense of a mechanism like ETEF, which enable retailers to provide power at a regulated price, yet protects them from the kind of financial disaster which Californian retailers recently experienced as a result of regulated retail prices and unregulated wholesale prices.

His assertion that contracting out electricity trading would “take a huge chunk of NSW’s power out of the national market” is also bunkum. If the proposal proceeds, all that will happen is that the trading function will be performed by the private sector, rather than our publicly owned utilities. He seems upset that there would be “reserve prices”, but surely he can’t be suggesting that a free market requires buyers and sellers to accept uncommercial prices.

Should a farmer be forced to send his tomatoes to market if the transport costs exceed the price he’ll get in the market?

According to Mr Ries’ logic he should, otherwise the market would be rigged.

Finally, I would have thought that any analysis of the New South Wales reforms would have given some attention to the results.

The facts are that for the last twelve months the average wholesale electricity pool price in NSW at $36 per megawatt hour was the lowest in the national market, as indeed it has been since the reforms began.

The pre-reform price was around $53.50, or $63 in today’s dollars.

NSW consumers, especially businesses, have secured a real $1.6 billion saving since reform began in 1995.

Yours sincerely

Michael Egan

This has got to be a joke

AFR, 8 February, 2002

Dear Editor

Please tell me that your article ‘Early days yet for public-private projects’ (AFR, 8 Feb) is a joke.

You report that NSW Opposition transport spokesman Barry O’Farrell says that this Government is ‘too cautious’ when it comes to public-private infrastructure projects.

What you fail to report is that Barry O’Farrell, while senior adviser to former NSW Transport Minister Bruce Baird, was one of the architects of Sydney’s disastrous Airport Link project.

The Coalition’s ‘no cost to the taxpayer’ airport rail project ended up costing the taxpayer over $700 million.

If Barry O’Farrell has learnt nothing from his debacle, this Government has.

Public private partnerships, as we’ve seen in this country and elsewhere, can have significant benefits or be costly failures.

Achieving the former and avoiding the latter requires good projects and good contracts, and appropriate care and caution along the way.

Michael Egan

NSW has fine debt record

AFR, June 12, 2002

Beware the baby boomer within! That old party animal Tony Harris is out to let the good times roll. (“Debt myths at our expense”, AFR, June 11). His feel-good contention that debt is good might fill some column inches, but it’s nonsense, and he knows it.

When the Carr Government came to power in 1995, the annual interest bill on NSW’s debt was nearly $1.7 billion a year. We’ve got that down to $760 million a year.

In other words, the NSW Government now has almost $1 billion extra for spending on hospitals, schools and other services.

And Mr Harris thinks that’s bad public policy! To be fair, Tony Harris does make the point that debt is only part of the picture that unfunded superannuation liabilities also need to be tackled.

We’re doing that, but the Commonwealth isn’t. Our net financial liabilities, including unfunded superannuation and other liabilities, have fallen from $32.5 billion in 1995 to $22 billion now.

They are expected to fall further over the next four years.

Michael Egan

NSW Treasurer

Sydney, NSW

Messing with facts

AFR, December 20, 2001

I challenge your readers to find any page in the recently released report by the NSW Auditor-General, Mr Bob Sendt, in which he makes the sweeping declaration that the State’s finances are a mess.

Your headline “NSW finances a mess: A-G” (AFR, December 14) bears no relation to reality.

Michael Egan

NSW Treasurer

Sydney, NSW.

Star City revenue

Daily Telegraph, October 23, 1998

Your claim (Editorial, October 23) that NSW will “forgo several million dollars in taxes” as a result of the recently announced 10 per cent casino tax for international premium players is completely wrong.

Perhaps you might explain how we can forgo revenue that we were never receiving. The fact is that the Star City casino has not previously run an international premium player program.

The revenue the State will receive from the casino’s new program is therefore new revenue.

Over the next few years, we are guaranteed to receive $24 million, but the likelihood is that it will be much more.

Michael Egan

State Treasurer


Big axe to state debt

Daily Telegraph, August 13, 1998

CONTRARY to Stephen Mayne’s report (Daily Telegraph, August 11), the NSW Budget position continues to strengthen.

In Peter Collins’s two Budgets as Liberal Treasurer of NSW, the average cash deficit was $750 million -$904 million in 1993-94 and $597 million in 1994-95.

In my four Budgets, the results have been a cash deficit of $150 million in 1995-96 and a surplus of $90 million in 1996-97, an expected deficit of $416 million in 1997-98 and a budgeted cash surplus of $45 million for the current year.

Indeed, this year’s expected operating result (the yardstick by which most States now measure their budget outcome) is $1966 million, by far the biggest of any State.

Since coming to office, we have also succeeded in reducing the State’s net liabilities by some $3.5 billion. That makes the Carr Government the first in the State’s history to substantially reduce debt, rather than add to it. We’re also paying for all the Olympic venues cash up front, so that not a single cent will be left for future generations to pay.

Michael Egan


Debt in NSW slashed by $2.5bn

Daily Telegraph, January 14, 1998

I WOULD like to correct the false impressions given in Stephen Mayne’s article, Giving credit where it’s due (Daily Telegraph, January 7).

Far from deteriorating, the strength of the NSW public sector has improved dramatically over the past 2 1/2 years.

Since coming to office in April 1995, the Carr Government has slashed State debt by almost $1 billion.

And, importantly for the future of our children, we’ve also reduced the State’s unfunded liabilities (for things like future superannuation payments) by about $1.5 billion.

In other words, in just 21/2 years, we’ve reduced the State’s total liabilities by about $2.5 billion.

That simply means the State’s financial position is better off to the tune of more than $400 for every man, woman and child in NSW.

Mr Mayne has also been quite mischievous in his comparison of Victoria and NSW public finances.

His article misleadingly compares the gross debt of NSW with the net debt of Victoria which had the effect of overstating NSW debt by $9 billion.

Australian Bureau of Statistics figures (June 1997) show that the level of net debt in NSW and Victoria represents about 10 per cent of each State’s gross state product (GSP).

But there is one critical difference. Victoria only achieved the NSW ratio of debt to GSP by selling its entire $20 billion electricity industry.

NSW, on the other hand, still has $25 billion worth of public money invested in electricity assets.

Victoria had to sell its electricity industry simply to get its debt down to the manageable levels of the other States.

NSW has no such imperative. For us, it’s simply a question of whether the assets tied up in our electricity industry are best left where they are, or whether the benefits to the community will be greater if they’re used in another way.

As I see it, the sale of these assets would give NSW an historic opportunity for vast new investment in our State’s social and economic infrastructure. That would mean vastly better schools, hospitals, roads, public transport, community services -better communities all round.

It would also mean the biggest job creation scheme Australia has ever seen.

Michael Egan



Send in the budget papers and more Egan letters

State public finances are one area that the media does not give enough attention. We’d like to fire up on this leading into the Victorian and NSW elections but we have only got a set of Victorian budget papers when we’d love the papers for every state and territory.

Anyone who sends in a set of non-Victorian budget papers to PO Box 318, South Melbourne 3205 will get a free subscription.

And we’d also like to work out if there is a more feisty political letter writer than Michael Egan. Jeff Kennett sent some beauties over the years but we’d love to be emailed or faxed some other examples on (03) 9696 0452.