Former NSW Treasurer Michael Egan has leapt into the trenches to defend his record in a strong opinion piece for TheSunday Telegraph. Sadly, it was full of the same old Carr-Egan bluff and bluster that
sucked in the NSW media for a decade while, in the background, the state’s finances were being
recklessly managed.

Nowhere did Egan concede that he inherited a state with taxes close to
the national average and departed with NSW comfortably leading as
Australia’s highest taxing state. And despite this revenue bonanza and an unprecedented property boom, NSW
was facing a deficit of $533 million in 2006-07 without decisive
corrective action, while all other states remained comfortably in surplus.

Then there is Egan’s misleading ruse of ignoring all the debt he piled up
in government business enterprises with his claim that:”We’ve now paid
off around $10 billion of debt and our general government sector is
virtually debt free.”

Er, what about the NSW Government as a whole which has more than $20 billion of debt outstanding as you can see from this T-Corp press release in January last year gloating that debt is at a four-year high?

The most laughable Egan claim was that NSW has grown its net assets
from $70 billion to more than $120 billion over the past ten years,
making it “the highest net worth of any government – federal or state –
in Australia”.

Egan actually put the figure at $127.4 billion in this strategy
document
he released in December 2004, but I’ll eat my hat if
Queensland isn’t worth more than NSW, because Queensland doesn’t have
$15 billion-plus in unfunded super and it has retained ownership of key
assets such as ports, rail and airports.

Public sector accounting really is a joke in Australia, because the
rules are so inconsistent. Egan’s
ridiculously inflated claim obviously includes every park and last
piece of art owned by the state of NSW, whereas the Commonwealth budget
confesses to a negative net worth of about $30 billion, so they’re
presumably not counting things like the $3 billion worth of art
owned by the National Gallery.

I reckon BHP Billiton is easily Australia’s richest institution with
its $150 billion market capitalisation, although the majority of these
assets are based overseas and owned by foreigners. The Catholic Church
probably comes in second with more than $100 billion of Australian
assets, although it is strictly controlled by
the Vatican. Whilst these are guesstimates, the state of Queensland
would be third with a net worth around the $90 billion mark, followed
by NSW with about $70 billion.

The Feds are clearly hamstrung by the $90 billion unfunded
superannuation liability and weakness in the Telstra share price, but
they’ll be back
into positive territory for the first time since Whitlam by 2008-09,
unless Howard and Costello decide to really crank up the tax cuts.

Peter Fray

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