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Will the Berejiklian Government be the next to go?

By Brendan O'Reilly - posted Tuesday, 19 March 2019

Two key elections are due shortly.  A federal election is expected about May, while the NSW state election (23 March) is almost upon us.  For at least a couple of years there has been an overwhelming expectation that there will be a change of government federally but the BerejiklianGovernment in NSW had looked safe.  It is now suggested that the Coalition may be at risk of losing its majority even in NSW.

The factors at play federally and in NSW are not entirely the same.  The BerejiklianCoalition Government has in fact had a lot of things going for it.

Firstly, NSW arguably is in the best financial shape of all the states.  In 2017-18 NSW enjoyed a strong surplus and record low General Government Sector net debt (negative $11.2 billion) as well as record net worth of $254.2 billion.  It currently has a trend unemployment rate of only 4.1 per cent, the lowest of any state.


Secondly, the public still has some memory of the corruption scandals surrounding previous Labor governments in NSW.  These involved Eddie Obeid and several ministers, and led to Labor's landslide defeat in 2011.

Thirdly, the current NSW Government still enjoys a solid majority of 51 out of 93 lower house seats in the outgoing parliament and needs a sizable swing to unseat it.

The BerejiklianGovernment, however has recently fallen behindin one recent poll, while four consecutive Newspolls have Labor and the Coalition locked 50-50.  In the past few years the Coalition lost two regional seats in by-elections: the formerly Liberal seat of Wagga in 2018 to an independent, and the formerly National's seat of Orange in 2016 to the Shooters, Fishers and Farmers.

The biggest recent negative for the BerejiklianGovernment relates to its high profile sell-off of public assets to fund new capital spending (which had its genesis during Mike Baird's period as Premier).  The theory was to free up large amounts of cash to fund new infrastructure.  This would boost the state's economy, improve services, and (hopefully) the government's popularity.

The divestment went broadly to plan, with some assets bringing more than expected.  The NSW Government reportedly has sold off more than 20,000 properties including schools and public housing dwellings since it came into office in 2011, raking in more than $9.1 billion.  It will also receive $7.6 billion from leasing 50.4 per cent of Endeavour Energy, having previously sold 50 per cent of electricity distributor Ausgridfor $16.1 billion.  Further disposals raised $2.6 billion from the lease of the state's Land and Property Information Service, and $4.2 billion for the transfer of NSW’s share of Snowy Hydro Ltd to the Commonwealth.

While voters felt some unease about the extent of the sell-off, most concerns have developed about the haste and execution of new infrastructure investment.  Sydney’s $2.1bn light rail project has now come to a virtual standstill (amid major legal disputes with the contractor) and costs have blown out.  Additionally, the WestConnex tunnel construction is said to be causing major cracks in homes, as well as depression and breathing problems affecting residents.  Most concerning voters, however, is the perceived waste of public money on stadium re-development.


On 23 November 2017, the New South Wales Government confirmed that Stadium Australia (Sydney Olympic Stadium) would be knocked down, with a new 75,000 seat rectangular stadium built in its place. On the same day it also announced that the Sydney Football Stadiumwould also be rebuilt, with over $2 billion to be spent on the two projects.  The State Government has since backed down on its proposal to demolish Stadium Australia, which will instead be refurbished.

The public is concerned about wasting public money.  Stadium Australia alone cost $690 million to build back in 1999 (and was supposed to serve the community for generations), while the Sydney Football Stadium is just 31 years old.  It is not obvious that either stadium needed much more than renovation.  It is also not clear why the taxpayer should bear the cost and not the various sporting codes, which appear to be awash with revenue from television rights.

Labor leader Michael Daley (in a smart political move) has made a big issue of the stadium redevelopment plans, and is capitalising on the fact that demolition work is coinciding with the run-up to the state election.  He initially warned that, if Labor wins the NSW election, it will not rebuild the Football Stadium and will instead pursue priorities in health and education.  His party's stance might have appeared more bona fide had Labor not had "form" of its own on this type of issue.  Back at the last federal election Queensland Premier Palaszczuk committed $140 million towards the Townsville Stadium, while federal Labor promised $100 million (in a bidding duel with the federal Coalition).

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About the Author

Brendan O’Reilly is a retired commonwealth public servant with a background in economics and accounting. He is currently pursuing private business interests.

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