The New South Wales Labor party has overestimated the potential dividends from electricity assets by more than $1.3bn, according to forecasts by the parliamentary budget office.
The costings of each of the parties’ policies ahead of Saturday’s election show Labor would keep the budget in surplus over the next three years with its proposed policies, and without privatising electricity assets.
Luke Foley has long claimed the Baird government is throwing away $1.7bn in revenue from the electricity assets it plans to partially lease, but according to the costings the revenue will drop to $407m by 2016-17.
“What about the doom and gloom merchant Mr Constance, who’s been predicting for months deficits from Labor. The parliamentary budget office reports [today], not only ongoing budget surpluses but stronger surpluses. [Constance has] been predicting a blowout in the state’s debt, the parliamentary budget office reports no increase in the state’s debt levels,” Foley said on Monday just after the PBO had released the costings.
“He’s been predicting Labor’s policies would blow the AAA, the parliamentary budget office reports a very sound set of numbers here. So I’m pleased to share the good news from the independent parliamentary budget office.”
NSW treasurer Andrew Constance said the costings had exposed Foley as misleading voters.
“Once again, Labor is reverting to form and trying to scare people into voting for them”, Constance said in a statement. “Tomorrow they’ll claim the Earth is flat. People have a right to be told the truth. Mr Foley has repeatedly relied on the illusion of a perpetual $1.7bn from dividends as his source of funding for more teachers, nurses and police.
“Now he must come clean on what taxes he will raise to make up the shortfall confirmed by the PBO.”
The PBO noted that under national electricity law, companies would not be able to raise electricity bills simply to increase profits or incur excessive costs if the Liberal government’s plan to privatise electricity assets went ahead.
The PBO report suggests ALP’s policies would save $515m by 2017-18, bringing the budget to a surplus of almost $1.48 bn. The PBO figures suggest the Coalition’s policies would deliver a surplus of $1.07bn in the 2017-18 financial year.
The partial privatisation of the state’s electricity assets has been the key issue of the NSW election campaign, with the Liberal party planning to make at least $20bn from leasing them. Labor is opposed, with Foley saying the state will suffer if it loses the revenue source.
- The PBO have asked for the following clarification:
The PBO has not made any forecasts of dividends from the electricity businesses. A briefing paper prepared in response to a request from the Premier for a costing of the Coalition’s Rebuilding NSW policy refers to dividend estimates prepared by NSW Treasury and published in the NSW government Half-Yearly Review 2014-15.
There is no difference between the government and the opposition in the starting point from which the budget impact statements cost the impact of leaders’ policies; both are based on the published forward estimates. “
