Newly installed and already embattled NSW Treasurer Michael Costa put
on an extraordinarily belligerent performance with Virginia Trioli on
ABC 702 Sydney this morning, reflecting the pressures of a man who has
just delivered the most irresponsible and worst received state budget
in more than a decade.

Clearly stung by a chorus of disapproval from the commentariat, Costa
nit-picked at every second adjective that Trioli used in what might go
down as the most difficult political interview she has done since the
infamous Peter Reith barn-stormed into her Melbourne studio during the
2001 federal election campaign brandishing pictures that “proved”
children were thrown overboard.

Costa’s accounting and political rhetoric is sounding remarkably
similar to the Cain-Kirner years, but he was telling blatant porkies
when he claimed NSW has a net wealth of $200 billion, when his own hard
to believe budget papers claim it is less than $130 billion.

I listened in to the Costa interview from Brisbane airport and was then
interviewed straight after and made the point that all this upward
valuations of assets was like Ansett coming out shortly before its
collapse claiming that, suddenly, its planes were worth billions more
than first thought. It’s an accounting ruse that even seems to have
sucked in the ratings agencies.

You can’t get away from the fact that NSW is on a debt hand-cart to
hell, with annual new borrowings of more than $4 billion expected into
the future, even though most credible commentators reckon the projected
cost-savings from 2007-08 onwards will be impossible for a union-run
Labor government to achieve.

And this cuts to the heart of the matter. Costa, a former secretary of
the NSW Labor Council, was gloating to Trioli that he is proud NSW
teachers, nurses and police receive the highest salaries in Australia.
He’s still talking like a union leader, not someone charged with
overseeing responsible economic management and balancing the books.

As president of the local kinder I would love to double the pay of our
staff, but to do this parent fees would also have to be doubled. NSW has
nowhere to go on tax because it is already our gold medal taxing state
levying its citizens 10% more than the national average and about 30%
more than Queensland. Even worse, it is going further into debt at an
unprecedented rate, just to do the equivalent of maintaining our kinder
and putting in an extension.

Let’s not mince words here. NSW will have to shed tens of thousands of
public sector workers – not quite the 100,000 that Jeff Kennett got rid
off – to stabilise its budget, but the public sector unions simply won’t
allow its parliamentary brothers to do that.

Therefore, NSW will remain on its path
to debt hell until someone takes control and undertakes the privatisation and downsizing necessary to make the state competitive
and sustainable again. That’s the choice facing voters next March.

Finally, check out the latest delusional letter from former NSW Treasurer Michael Egan in today’s AFR.
It’s a classic of the genre. And let’s hope Trioli, who lifted her
ratings to 7% in the latest survey and is now within striking distance
of a faltering John Laws on 7.7%, makes this morning’s Costa interview
available as a podcast that we can link to tomorrow.