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Asset Privatisation

Published on: October 2022

Record: HANSARD-1323879322-127881

Asset Privatisation

Mr TIM CRAKANTHORP (Newcastle) (16:58:04):

I move:

That this House opposes the further privatisation of New South Wales Government assets.

It gives me great pleasure to move this motion. Here we are today, knocking on the door of $100 billion of State Government assets that belong to the people of New South Wales being privatised. The number just keeps going up, despite the promise that was made to the people of this State four years ago. The Premier said then, "Will we do any more sell-offs? No. No more sell-offs. If we are going to sell more public assets, we would tell you." Does that sound familiar? If you ask this Government, it is not privatisation.

Mr Clayton Barr:

What is it?

Mr TIM CRAKANTHORP:Budget Statement2014-15

It is asset recycling. In the Government's own words, the states:

The strategy aims to effectively manage the State's balance sheet by unlocking equity, de-risking the balance sheet, and recycling proceeds into new economic and social infrastructure investment.

It states it will "effectively manage the State's balance sheet"? The most recent budget has an $11.3 billion deficit. That is triple what this Government forecasted. That is great maths there.

Ms Anna Watson:

They are not good economic managers.

Mr TIM CRAKANTHORP:

They are disgraceful economic managers. They said it will "effectively manage the State's balance sheet", well that is going really well for them, is it not? Put that one on record. But they will fix it. What they could do is set up a sham entity.

Ms Anna Watson:

That's a good idea.

Mr TIM CRAKANTHORP:

It is a great idea. Shift some of the expenses across so they can cook the books to make the budget look even better. They cannot call it the Transport Asset Holding Entity, because that is already taken. Bugger! What a shame. How about the "Hospital Asset Holding Entity"? Or maybe just the "cover-up entity"? We all know what this Government has done with its sales.

Ms Anna Watson:

Dodgy, dodgy, dodgy. Dodgy Liberals.

Mr TIM CRAKANTHORP:

Absolutely dodgy. They sold the Port of Newcastle for a long-term lease of $1.75 billion and shackled it with a cap on containers. It was a handbrake on the economy of this State, particularly northern New South Wales. The member for Oxley across the Chamber might even be able to attest that it was a terrible handbrake given that it went through at the National Party conference as a policy statement in support of getting rid of that terrible cap and the penalty. I am sure the National Party will have a lot more to say on that as time goes on. We have seen the catastrophic privatisation of bus services. We all knew what was going to happen there? We did not need an inquiry to tell us what it was going to be like, but we had the inquiry and of course it labelled it a disaster. Anyone in the region who has been subject to the bus privatisation nightmare could have told us that. We only have to look at the schoolchildren left standing by the side of the road because bus stops are closed, not to mention the blowouts in journey times. Elderly people were left isolated and abandoned, and the list goes on.

The Government sold off the buses and a whole list of things, including poles and wires. Labor warned at the time that it would mean electricity prices would cost a lot more, and what did we find out just last week? Companies have been obtaining super profits at the expense of the people. There is the great example of the old Northern Beaches Hospital. We keep bringing that one back. What a pleasure that one is! That privatisation was so disastrous that the committee recommended that the Government never privatise one of its hospitals ever again. But maybe it has been outdone by the Vales Point Power Station. That is the great record of the Liberal-Nationals. It is one of their finest examples. It was sold in November 2015 for the princely sum—

Mr Clayton Barr:

How much?

Mr TIM CRAKANTHORP:

It was sold for $1 million and resold in September for $200 million. What a great financial manager this Government is. We only have to look at the toll roads, NorthConnex, the M7, the Cross City Tunnel, the M2, Lane Cove Tunnel, the M5 or the Eastern Distributor.

Mr Nathaniel Smith:

How is that light rail?

Mr TIM CRAKANTHORP:

We would not mind being a shareholder in Transurban. The list goes on. Social housing—$3.1 billion worth of housing has been sold. But we are told that it is to create new stock. They are selling off houses with multiple bedrooms in suburbs where the land value is higher, closer to the shops, public transport and services, only to build little one- and two- bedroom boxes further out from town centres. That is not just selling the asset. That is selling off their social conscience.

Ms Anna Watson:

They don't have one.

Mr TIM CRAKANTHORP:Time expired.

That is the problem. Tens of billions of dollars are flowing into the Government's coffers and it still cannot resource our hospitals properly. It cannot fully staff a school. It cannot properly maintain the social housing properties that are left. Now this Government will allege that those big infrastructure projects would not happen without the money from its sell-offs. If this is how the Government is funding the projected budget, how will it fund the blowouts? An extra $6 billion for Metro City and Southwest, Parramatta Light Rail—the list goes on and on. The Government is embarrassing itself now, but it can actually stop it happening. It should take a leaf out of our book. Stop the sell-offs! []

Ms FELICITY WILSON (North Shore) (17:05:46):

We know it is Labor conference time when the member for Newcastle sticks his head above the parapet because he is worried about who is coming for his electorate—we know that Nuatali Nelmes would love to be in this place, Crackers. That is the only time we ever hear from him. He comes in here flailing his arms and screaming about hypocrisy and privatisation. He comes in here complaining and thinking about whether or not he actually has any chance of continuing to run as the member for Newcastle. I know it is very challenging for the current member for Newcastle, but I want him to have a little think about the actual facts behind what he said.

In the member for Newcastle's contribution I heard a long shopping list of things and I thought he was talking about Labor—I am not sure what other members thought. He talked about the oppressive number of toll roads and tolls applied to the people of New South Wales. He talked about the Cross City Tunnel—Labor's tolls. He talked about the Lane Cove Tunnel—Labor's tolls. I am sorry, but when Labor has the longest tolling concessions in the history of Australia, those opposite should not tell us that we are the problem. The member for Newcastle talked about potential cost blowouts on infrastructure projects—at least we build infrastructure. Let us look at the Epping to Chatswood rail link, originally the Parramatta rail line—half a rail line, twice the cost. Let us look at the CBD to Rosehill metro. They should not talk about billions being lost; Labor lost half a billion dollars for nothing. The CBD to Rosehill metro bore nothing. Then they complain to us about hospitals—for instance, the Northern Beaches Hospital. I am sorry, but it was John Hatzistergos and Morris Iemma who promised the people of New South Wales a northern beaches hospital. They scrapped that promise. They said within four years in 2006, and they never did it.

Ms Anna Watson:

What has this got to do with privatisation?

Ms FELICITY WILSON:

The member for Shellharbour should have listened when her colleague was speaking. She does not want me to respond to what was said. So, yes, this Government delivers time and time again. On this side of the House, we deliver the hospitals. We deliver the roads. We deliver public transport. We deliver cycleways, rail, metros, buses, extra bus drivers and electronic buses. We deliver everything that Labor said that it would, but it failed to deliver time and again. We succeed because we know how to manage the books.

When it comes to the question of privatisation, I feel like we have just heard the first policy announcement from the member for Newcastle. His entire first minute was a list of the ways in which he would try to cook the books to make things happen and go about privatising new assets. I am sorry, but this Government does not take advice about economic management from the member for Newcastle. We make our own policies and our own plans. We went to the people of New South Wales with the transaction around the poles and wires. They said yes, and the dividend has been profound in the city, in the bush and in areas that those opposite would never invest in. That is what happens with the Liberals and The Nationals in government: We deliver the outcomes to the people of New South Wales.

Those opposite do not understand. They love spruiking our projects in their communities and in their newsletters. They love going to the new schools and to the new hospitals that we have built. They just cannot accept the fact that we are so much better than them, so they try to spin the truth. But our asset recycling program created a pipeline of more than $100 billion of that vital infrastructure. How much infrastructure did Labor deliver? It promised 12 rail lines and delivered half of one. We on this side of the House make the tough decisions and manage our finances in order to deliver outcomes. Let us talk about Labor's record. Those opposite claim that they oppose the concept of privatisation, but that is just policy amnesia. When Labor was last in government, it sought to privatise New South Wales electricity generators—the gentrader transactions. The Assistant Speaker would recall that.

The ASSISTANT SPEAKER:

The member for South Coast will come to order.

Ms FELICITY WILSON:

The Assistant Speaker would recall Labor proroguing Parliament early in the dead of night to push it through without any transparency to the people of New South Wales.

The ASSISTANT SPEAKER:

The member for South Coast will come to order.

Mrs Leslie Williams:

The member for Shellharbour.

The ASSISTANT SPEAKER:

I mean the member for Shellharbour. I am sorry.

Ms FELICITY WILSON:Time expired

It is thanks to Labor that the people of New South Wales lost $1.8 billion because of that botched transaction. The Leader of the Opposition wants to pretend he is a warrior against privatisation—and he is often opining on Twitter about these things—but Chris Minns was chief of staff to John Robertson when he privatised Parklea prison. That is right, Chris Minns himself signed off on the privatisation of Parklea prison. Those opposite need to stop with their hypocrisy and leave the job to us. []

The ASSISTANT SPEAKER:

I incorrectly called the member for South Coast to order. The member for South Coast was not in the Chamber. I was referring to the member for Shellharbour.

Interruption

[]

Mr CLAYTON BARR (Cessnock) (17:11:41):

To help members on that side of Parliament understand what we are talking about today, I will break it down for them. I will provide budgetary evidence for what I am about to say in just a moment. They all know that I read it and I have a few excerpts here. Those opposite clearly cannot understand the budget so I will put it into simple terms that they might be able to follow. Let us imagine a family that is lucky enough to have an investment property which provides a return, and they make a decision to buy a new sports car. They sell off the next 99 years of income from that investment property to someone and say, "Hey, listen, I need a short-term sugar hit. I've got to get the new sports car. You can take all the money that that makes for the next 99 years, even though it's going to be 100 times what I'm going to charge you today, but if you give me a little bit of money today, I'm going to go out and buy a sports car." Someone says, "That's a great deal. I'll take that. I'll sign the 99-year lease to for that."

So that family has a nice new sports car. The moment they buy the new sports car, it starts costing them money—registration, insurance, tyres, depreciation costs, running costs, repairs, the whole lot. But it is in their shed. Good on them. That is fantastic. However, their household income no longer has the revenue from the rental and their family grows. They have more babies—they are like the Perrottet's, for example. As their family grows, the cost of fruit, vegetables, bread and milk keep going up. The cost of new jeans and sneakers for the kids keep going up, but they do not have that old reliable income any more. So what does that family do?

They have to start making cuts to some of the basics in their household. Then the bank manager comes along and says, "I'm a little bit concerned about your finances because, firstly, you haven't got the income you originally had and, secondly, you keep on using your credit card to buy the sneakers, joggers, replacement refrigerator and things like that. I am concerned about your credit rating. Can you explain to me how you are going to maintain this lifestyle without the income you used to have?" They say, "We're going to sell the sports car and buy a motorbike." But the motorbike comes with the same problems. It depreciates and has expenses from the moment they buy it. The value of the thing is going south and costing them more money than ever before. The bank manager comes along again and says, "Listen, I'm unconvinced. Your credit rating is going to disappear." That is exactly what is happening in New South Wales.

Budget Paper No. 1

Don't worry about the rental property; think of it as our poles and wires, our ports, our Land Titles Office or the retail income from Darling Harbour and Circular Quay. That is what we've sold off: regular, reliable income. What we purchased—whether it is a stadium, a road, a tunnel, trains, trams or whatever—costs money and depreciates, but we do not have the reliable income. We have what some people would call a fiscal gap. It is not just me saying there is a fiscal gap. I refer to pages E-1 to E-3 of the Government's . The Treasury—and your own Treasurer, who signed off on it—is concerned about the fiscal gap as well. The Treasurer can see that the money coming in is not keeping up with the increase in expenses and costs. Standard & Poor's has taken away one of the As from our triple-A credit rating. The other two financial agencies are equally concerned about our triple-A credit rating.

When those opposite arrived in government the borrowings of this State were $20 billion. Today that amount is $180 billion. That is a 900 per cent increase. Who is going to pay it off? Will any Government members be around for the next 99 years to pay off that debt? No. They have shifted the debt onto their kids and their grandkids. Meanwhile they are saying to our key workers—our teachers, our nurses—"We no longer have the reliable, regular income so we can't afford to do that." That is what privatisation is. I encourage those opposite to read the budget papers because the story is all there.

Mrs MELINDA PAVEY (Oxley) (17:16:44):

I agree with member for Cessnock that the story is all in the budget—when we add the asset side of the balance sheet. The member for Cessnock would do his constituents more of a service if he was not as patronising about them selling an asset for a sports car. I think the constituents of Cessnock are far too sensible to do anything so stupid as to sell infrastructure or an investment property for a simple sports car. I add that in 2010 it was his lot that gave a 40‑year licence for NSW Lotteries to Tatts Group for almost $1 billion.

Members must be honest in conversations with their communities about why we are doing this. The Government has recycled assets not to buy a sports car but to build schools and hospitals, or put in a dual carriageway of the Pacific Highway that is saving 53 lives every year. We have now turned to the Princes Highway and the Great Western Highway to do similar work. We are recycling our assets and, at the same time, creating economic growth, jobs and opportunities. Some would say we are doing too good a job of that because infrastructure costs have increased and because of the challenges sourcing engineers and so on. But we are working through those positive challenges as we build the infrastructure for New South Wales.

Our sale of Snowy Hydro to the Federal Government delivered $4.2 billion to New South Wales and our regional communities. Those funds have allowed us to build schools in the Snowy, to build infrastructure, to fix public toilets in our communities and to put female changing stations in our sporting grounds. If the member thinks that is a bad idea, I suggest he goes to the people of Cessnock to criticise it. No, he is just creating a conversation around the idea that people are stupid enough to sell an investment property to buy a sports car. People are not that silly.

The ASSISTANT SPEAKER:

The member for Cessnock will come to order.

Mrs MELINDA PAVEY:

Our Government is being very responsible in recycling assets and creating a record spend in infrastructure across New South Wales. It has built WestConnex, a project that members opposite did not support. I do not know whether they supported the Lane Cove Tunnel. I do not know whether they supported the Cross City Tunnel; not many people did because the traffic projections on that project were just appalling. But thanks to the WestConnex we now have a super fund for projects throughout western Sydney. I cannot see Labor councils criticising any of those projects. Those actions have been positive. In June 2011 New South Wales net assets were $163 billion, or $22,000 per capita. In June 2022, only 11 years on, we have grown those assets to $250 billion, or $30,000 per capita, which is working towards making the lives of the citizens of this State better.

Ms Felicity Wilson:

That's your lesson, Clayton.

Mr Clayton Barr:

If you don't understand what it actually means, don't bother.

Mrs MELINDA PAVEY:

We do understand, Clayton.

Mr Clayton Barr:

You don't. Those assets are both on the books and off the books.

The ASSISTANT SPEAKER:

The member for Cessnock will come to order.

Mrs MELINDA PAVEY:

We do understand that recycling assets ensures that we have built infrastructure that has created better, safer and more modern hospitals; better schools; better roads; and better public transport across New South Wales. These are the things that we can do. It is not as if those opposite did not do it when they were in government; they just did not do it well enough.

Ms Yasmin Catley:

Not as much.

Mrs MELINDA PAVEY:

The member for Swansea says that because she talks with two tongues, two mouths, and is not honest. Members opposite did it. Labor did it federally with Qantas and Telstra. Labor did it in New South Wales with Lotto, the Cross City Tunnel and the Lane Cove Tunnel.

Mrs Leslie Williams:

Gentraders?

Mrs MELINDA PAVEY:Time expired

I thank the member for Port Macquarie for that point. Gentraders—what a joy that was! It was not a joy for the taxpayers but it was for a certain amount of Labor Party Cabinet Ministers. In the dark of the night they did the Gentrader transition and we lost $1.85 billion. That is how those opposite do privatisation. That is how they recycle assets: They lose $1.85 billion. Well done, Labor. Let us keep going, Liberals and Nationals. [.]

Ms YASMIN CATLEY (Swansea) (17:21:52):

I support the motion of the member for Newcastle. We have seen our assets sold off, resulting in increased pressure on the cost of living. Cost of living is the one thing that this Government wants to get down, yet it is the one thing it has perpetuated while robbing the people of New South Wales of valuable public assets. I start with the privatisation of the Newcastle transport network and the disgraceful repercussions that has had for communities across the Hunter. What we got from that privatisation was poorer services, longer travel times and people left without any transport whatsoever. It is an abject failure and one that this Government should be ashamed of.

I note other instances of privatisation throughout the State. In his contribution the member for Newcastle mentioned the sale of Vales Point Power Station. In 2015 it was sold for $1 million. What a sweet deal that was, let me tell you! Of course, members know from media reports that recently it was sold for more than $200 million. Anybody who says that is a good deal needs their head read, quite frankly. The sale of that site caused much anxiety throughout the community. It puts both jobs and the community at risk, not to mention that we could be looking down the barrel of further price hikes when it comes to the delivery of power.

That brings me to the poles and wires this Government sold off. Data released by the Institute for Energy Economics and Financial Analysis confirms that power prices have gone up since privatisation. That is confirmed. Do not try to get out of it. We were told that we would receive a $130 reduction in bills, but that simply has not occurred and it will not occur. Between 2014 and 2021 energy networks collected 67 per cent in profits from those privatised electricity networks. That means every single household in New South Wales is paying $100 more for their electricity. The Government got a bit shaky on a couple, and we all remember those. What about when it tried to sell off our 11 sport and rec camps? That was a great idea. But the five public hospitals was my favourite. That included Wyong.

Ms Anna Watson:

And Shellharbour.

Ms YASMIN CATLEY:

And Shellharbour, of course. It was only through committed community campaigns that we could save those very valuable assets in our local communities. I applaud every member who came into this Parliament. It is not just bout the community. We should also reflect on the comments about privatisation that were made by the then chairman of the Australian Competition and Consumer Commission, Rod Sims. For those who do not recall, Mr Sims delivered a keynote speech to the Melbourne Economic Forum in which he said that price gouging by inadequately regulated monopolies before or after privatisation aimed at buffering the sale price for cash-strapped governments—like this one—is the common thread that has led to his losing patience with governments' privatisation agendas. He is a pretty respectable man, and one whom I certainly respect.

Time expired.

He went on to say that price gouging, in which private organisations increase the prices of services, is turning him against privatisation after a professional lifetime of being a strong advocate for the efficiency-boosting powers of private ownership. Mr Sims went on to talk about the excellent example—which the member for Newcastle pointed out—and that is the Government's sale of the 99-year lease at the Port of Newcastle. The Government not only sold it for $1.75 billion to Hastings Funds Management and China Merchants Group but also put a deed in place to keep the port uncompetitive. I have a long list of all the privatisations that have been implemented by the Government since 2011. They include Eraring Power Station, Shoalhaven Hydro, Delta Electricity, Mount Piper, Wallerawang, an Ausgrid building in Sydney, Green State Power and Macquarie Generation. The Government has flogged off many properties at Millers Point. It sold off 13.5— []

Mr NATHANIEL SMITH (Wollondilly) (17:27:01):

I did not know it was comedy night in the bearpit with the powerful Hunter-Newcastle Labor faction, which is on the outer with the leadership team. They have been given a go today—isn't that wonderful? But what a pathetic go it has been. We want to talk about asset recycling, which is fundamental to the strength of the New South Wales economy. It delivers projects that are essential to make a brighter future for the people of New South Wales. Only the Coalition Government's leadership can deliver the responsible fiscal management necessary for asset recycling in the State. Critical infrastructure projects deliver benefits across the State, whether it is roads, bridges or hospitals. Look at the hospitals we have built. Campbelltown Hospital was worth $632 million and the Bowral and District Hospital was worth $128 million, and there are many more.

Those projects require a significant economic commitment and only the Coalition has the economic management and skill to ensure they are managed in a fiscally responsible way. The Government's rigorous and sophisticated assessments allow the Government to unlock capital that would otherwise be tied up in assets or businesses. That capital contributes to the strength of our economy. Through the NSW Generations Fund, capital from assets is invested to ensure a competitive return for taxpayers, a sustainable debt position over the medium term and to guarantee long-term investment in world-class infrastructure. The Government's strong record on economic management has brought forward the delivery of vital community infrastructure that the people of New South Wales have never seen before. They did not see any under the 16 years of neglect from those opposite.

Let us look at the WestConnex transaction, which is a great demonstration of successful asset recycling. Only the Liberals and Nationals could have achieved that. The sale of WestConnex generated $20.4 billion for the people of New South Wales, of which 51 per cent has been invested in the M4-M5 motorway link and other infrastructure to better the lives of people in New South Wales. The remaining 49 per cent, or $10.3 billion, has been invested in the NSW Generations Fund, ensuring debt retirement now and into the future. Thanks to the successful WestConnex transaction, the Liberals and Nationals have been able to deliver $5 billion into the WestInvest program.

Labor mayors, especially the Mayor of Bankstown—who has been a very popular figure in this House over the past few weeks—have been parading about, saying how wonderful WestConnex is. The Mayor of Blacktown has received other investments to improve Blacktown and surrounding areas. We are investing in western Sydney, which the Opposition did not do when it was in government. The $5 billion WestInvest program will fund infrastructure projects to support livability and community amenity in western Sydney in the following areas: quality green and open spaces, community infrastructure, school modernisation, arts and cultural facilities, high street activation and local traffic programs. The WestInvest program was opposed by Labor, but its mayors do not—they love it. The Liberals and Nationals have invested in the people of western Sydney, while Labor did sweet bugger all.

The ASSISTANT SPEAKER:

The member for Blacktown will come to order.

Mr NATHANIEL SMITH:

Let us look at Labor's record. It has run a concerted effort to deceive and mislead the voters of New South Wales. Spooky Mookhey and Miserable Minns are running a scare campaign about privatisation and they have lied about their own record. They lied to the people of New South Wales about the impact of the sale of poles and wires. They claim it led to wholesale price increases, but they do not understand that poles and wires are about network costs. In fact, the former Leader of the Opposition was the architect behind overturning the Labor Party's ban on privatisation. The Leader of the Opposition formulates his economic policy in 140 characters or less by claiming that "privatisation doesn't work". What he means to say is, "I don't know how privatisation works."

When the Leader of the Opposition was a chief of staff, Labor signed off on the disastrous Parklea prison privatisation. I remind members opposite that the former Labor Government botched the Gentrader privatisation. Asset recycling has delivered roads. In my own area Labor sold the Southern Highlands line for $1. It put freight before passengers. Labor members did not care about the people of the Southern Highlands. Bob Carr engaged in class warfare when he said, "I don't want to get a train from Bowral to come to Sydney." Labor did not care. Asset recycling has delivered roads, rail, schools and hospitals years ahead of time thanks to outstanding economic management by the Liberals and Nationals. We are making New South Wales great again.

Mr TIM CRAKANTHORP (Newcastle) (17:32:08):

In reply: I thank the member for North Shore, the member for Cessnock, the member for Oxley, the member for Swansea and the member for Wollondilly for their contributions. The member for North Shore got very mixed up with the topic. She was very concerned about the teals taking her seat in this place. Instead of focusing on the topic, she tried to coach not only Labor but also the Speaker. She was very confused. She forgot that her Government has been in power for 12 very long years when she tried to hark back to the years before. The member for Cessnock gave us a very sound sports car-motorbike analogy to make it very simple for those across the Chamber, who have real trouble grasping basic budget issues. Government members have trouble taking responsibility for their mass privatisation agenda. He exposed their $180 billion debt, and boy did they get uncomfortable.

Unfortunately the member for Oxley did not quite understand the sports car analogy but, despite that, she became caught up in using the sports car—the spoils of all that privatisation. She got into Federal Government grants and ignored the Northern Beaches Hospital debacle. The member for Swansea highlighted the rising cost of living, the Newcastle bus service disaster and the absolute debacle at Vales Point Power Station, including the rising cost of power prices which has come as a result. She made some very good points when she quoted the former chairman of the ACCC on price gouging, who has turned against privatisation. I welcome the comments from the former chairman of the ACCC, who was absolutely horrified by the privatisation of the Port of Newcastle and has taken NSW Ports to court over it.

It is unbelievable that this Government—a Liberal government—would set up such an anti-competitive deed of agreement. The member for Wollondilly rightly recognised that Team Hunter is the true force in this Parliament. He got very stuck looking back over the years. He did not seem to acknowledge the huge debts that his Government has created through selling off the cash cows for the quick, quick, sugar hits. That is all he likes—the quick sugar hits to try to give this Government a little bit of something. He lowered himself by calling us names—a true sign of someone struggling to win an argument. This is the worst record we will ever see. Not since the criminal government of Bob Askin have the people of New South Wales seen such systemic and widespread abuse of public office. Shame on you all!

The ASSISTANT SPEAKER:

The question is that the motion be agreed to.

The House divided.

Ayes40

Noes42

Majority2

Motion negatived.