NSW Treasurer Michael Egan is Australia’s most feisty political letter writer and this exchange with Crikey even attracted the interest of The Daily Telegraph.

Sealed section for subscribers October 15

Plunging superannuation returns is the global scourge sweeping through governments and corporates.
The NSW Government is no different, although they employ Enronesque accounting techniques to continues claiming they’re in surplus.

Cynics in PR are closely watching for politicians to “take a dump” with some bad news whilst the nation focuses solely on the Bali bombings.

The NSW budget result comes into that category. The SMH reported the figures on Wednesday morning as follows

Do you like the way they have revalued Crown land up by $4 billion but didn’t take the superannuation hit through the budget like the Victorians did.

This quote in the Fin Review is telling. They paraphrased Standard & Poors director Rick Shepherd as follows: “However, he noted that different accounting methodologies had helped it avoid some similarities with Victoria’s Labor Government, which recently moved to revise its anticipated Budget surplus downwards.”

The key point is that unfunded superannuation in NSW has blown out from about $9 billion to $12 billion but they have not filled the hole through the budget. This is dodgy and any claims of a surplus are a mirage. If you reckon company accounting is deceptive, this sort of stuff is worse.

Michael Egan calls Crikey a creep

From the October 17 sealed section

This letter just rolled off the fax from Australia’s most famous political letter writer, NSW Treasurer Michael Egan:

“Dear Crikey,

You little creep.

Fancy suggesting that I deliberately released the NSW Report on State Finances 2001-02 two days ago “whilst the nation focuses solely on the Bali bombings”.

The timing of the report’s public release was determined months ago, when the Committee for Economic Development of Australia agreed to arrange a luncheon event for the purpose.

The CEDA announcement of details of this lunch was e-mailed to its members on 26 September, 16 days before the tragic events in Bali.

I was happy to present my Budget outcomes to the CEDA members. After all, it was another great result which included: a sixth Budget surplus from this Government, an increase in the State’s net wealth and a decrease in State sector debt.

In fact, it’s the best result of any government in Australia.

The CEDA officials and members who spoke at the event could find no fault with the Budget outcome. Even Fairfax journalists couldn’t find anything to criticise.

Your assertions regarding the timing of this report’s release is cynical and reprehensible.

Try checking your facts. It’s called journalism.

By the way, regarding your so-called ‘Egan diary’: it clearly can’t be my work. It’s neither funny nor vicious.

Michael Egan
NSW Treasurer

Michael Egan’s misleading letter

This subscriber response went out in the October 18 sealed section:

Stephen,

It must feel good to finally receive one of Mr Egan’s famous missives. I guess it shows you’ve really made it.

I think Tricky Mickey has misled you however.

In the letter that you published he makes a big deal of the fact that the State’s net wealth increased.

Not true.

Net Financial Worth, which is a fairer measure of the State’s true fiscal worth actually fell by $1.1 billion between 2001 and 2002.

Net financial worth is a measure of total financial assets minus total liabilities. It does not include non financial assets – a measure of the State’s land and other fixed assets.

Interestingly, the accounting for land and fixed assets came in about $8 billion over budget.

Why? Half of the increase comes from Egan increasing the asset value for unoccupied crown land from a nominal $1000 to $4 billion. This includes a valuation for all NSW land on the continental shelf out to the 3 nautical mile limit.

The RTA revalued its property and roads upwards by $1.7 billion, and total asset revaluations hit $3.3 billion.

It is interesting that these increases came out in the final budget report, and not in the actual budget. It was perhaps fortunate timing given the dismal performance of the State’s super funds and the $2.4 billion increase in unfunded superannuation liabilities……

As the 2002/03 Budget says “Net Financial Worth excludes physical assets such as property and infrastructure which can be subject to significant valuation movements. It is a useful indicator for examining the soundness of a government’s fiscal position, particularly over the medium to long term.”

Is Tricky Mickey going to argue with his own Budget?

Cheers, Name withheld

Daily Telegraph picks up the story

By Mark Skelsey
October 19

`Little creep’ disgruntles Treasurer

ANY letter which starts with the sentence “you little creep” is bound to be worth reading.
Doubly so when it’s from NSW Treasurer Michael Egan.

Mr Egan exploded at a claim on the Crikey website that he had released the Budget figures on Monday to avoid scrutiny behind the Bali tragedy.

He faxed Crikey author Stephen Mayne, saying the Budget report’s release had been set for two months.

Peter Fray

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