Mini-budget reactions

So the NSW mini-budget came out yesterday.  It's not a mid-year review or an update.  No, it's a mini-budget - pay it no heed.  However you call it, it has some maxi consequences for the future design of Sydney.

Having looked through the mini-budget paper and the Treasurer's speech I noted a few interesting points that will have a significant effect on Sydney's urban development and transport.  And here they are in no particular order:


The State Infrastructure Strategy (SIS) will be revised later this month to bring it in line with NSW's new economic outlook and mini-budget forward estimates.  Changes to major plans like the electricity sell-off and the North West Metro threw the entire SIS out of whack and it needs to be reprioritised.  The money made available for other transport projects is cancelled out by the need to maintain investment in electricity generation.


The 15-minute Manly Jetcat service has been cancelled.  Roll on the 30-minute Manly ferry service.


The parking levy has been increased from $950 to $2,000 in the CBD, North Sydney and Milsons Point and from $470 to $710 in Parramatta, Bondi Junction, St Leonards and Chatswood.  The levy, a fee for maintaining commercial parking spots in these suburbs, will be passed on directly to shoppers and commuters in the form of casual and permanent parking rate increases.

In addition to other measures, RailCorp will be saving $9m over the next four years by "reducing bussing costs during planned maintenance by aligning services with need."  This sounds like less rail buses come upgrade season.  Unfortunately, it's always upgrade season.


The $181m upgrade to convention facilities at the Sydney Showgrounds at Homebush has been cancelled.  This upgrade was designed to expand the capacity of the Sydney Convention and Exhibition Centre in Darling Harbour and bring more events to Sydney.  I will be interested to see if this affects plans to build a business park on the grounds.


Rail fares will increase.  When you're looking at a billion dollar deficit and the Independent Pricing and Regulatory Tribunal recommends increasing rail fares, you do it. 

Harbour Bridge and tunnel tolls will go fully electronic.  Tolls will increase during peak and decrease at night.  This has been one of the most controversial decisions in the mini-budget.  Widely mistaken for a congestion tax, the changes are designed to be a peak travel deterrent.  Many commentators and northern residents have asked, quite rightly, why this change has only been applied to the bridge and tunnel, effectively making it a tax on north shore residents.  The Government's reply is that the program may be expanded to all toll roads in the near future.  Many have argued that this decision is politically motivated with the Government protecting their marginal seats along the M4 and M5 routes and penalising the Liberal voting suburbs in the north.


From 1 July 2009 the First Home Owner's Scheme (FHOS) will be applicable only to homes under $750,000.  Hmm... interesting.  I don't know how this one will affect the housing sector.  My guess is it may discourage a few first home buyers from over-reaching.


The Victoria Road/Iron Cove Bridge upgrade has not been affected.  This is probably a good thing since the new tolls on the bridge will probably drive additional cars onto Victoria Road.  Ouch.


A small change to the time-honoured M4/M5 Cashback scheme - valid Cashback claims will now be limited to travel undertaken in the last 12 months.  How many commuters were putting in bulk claims from the last three years, I wonder?


The North West Metro has been replaced with a CBD metro.  I joked here that the Rozelle end of the CBD Metro would have a car park so commuters from Rouse Hill could drive to Rozelle and catch the Metro from there.  Well, it looks like they will be building a bus-metro interchange at Rozelle instead.



A $3000 FHOS bonus to newly constructed first homes, in addition to the Federal Government's increases.  This is clearly designed to apply upward pressure on the flagging housing construction sector.  Unfortunately it will be completely absorbed in the downward pressure applied by increased land taxes.



The M4 extension, M5 expansion, Western Metro and North Sydney Freight line projects are officially on hold until at least 2012 unless the Commonwealth ponies up the cash.

There has been a general negative reaction to the mini-budget.  Most of it coming from north-west residents who argue that the entire mini-budget is skewed against them.  With the lack of transparency in the decision to replace the NW Metro with buses, increase tolling on the Harbour Bridge and tunnel and increasing rail fares I can see their point.  Criticism also comes from analysts and economists who claim that every move to invigorate the housing sector is cancelled out in one way or another and that an economic downturn is the wrong time to be increasing taxes and reducing capital investment.


A lot of people have criticised the Government's focus on maintaining their AAA credit rating.  The Government claims a downgrading of their rating would deter investors, increase interest payments, reduce business confidence and represent a reduction in fiscal discipline.  Unfortunately the experts say this is exactly the time to increase debt, invest and provide an economic surge rather than save to maintain a high rating.

NSW Labor is looking down the political and economic barrel.  My advice is be bold, think big and do it now!  Bring in congestion taxes, trains, buses, variable tolling!  The only way to win an election is through vision and action.  Hearts and minds!  If you're still confused try a one-on-one coaching session with Clover Moore.

Just bloody build something other than a tollway!