Home' Future Building: The Australian Infrastructure Review : Volume 4 Number 1 Contents futurebuilding 5
Volume 4 Number 1
The Hon Mike Baird MP
There needs to be rigour around the projects
you're putting forward; and, once you have that, you
need to get on and fund them.
New South Wales has taken care to get the
planning right by looking at metropolitan and
state plans and identifying growth areas where
infrastructure is required. We have looked at the
projects that are required, and have done extensive
economic analysis on them.
We established Infrastructure NSW (INSW) under
the stewardship of Nick Greiner, and that organisation
produced a State Infrastructure Strategy. Governments
will come and go, but our hope is that this plan is
something that stays. This consistency is important to
the infrastructure sector, because you want to work
with a government that is constructive, but ultimately
you want to have the opportunity to work with
successive governments to deliver the projects.
Certainly, that's what INSW has done. It has
provided both a short-term plan and a long-term
plan for what we can do over the next 20 years that,
importantly, will establish the projects that require
budget consideration now.
We have a ve-year, funded plan to attack that
long-term infrastructure strategy. Stakeholders have
roundly applauded the prioritisation list, and we
really thank Nick Greiner for his stewardship of that.
It provides a very clear road map.
The priorities have been established in
different timeframes, and throughout this process
WestConnex was identi ed as a signi cant project.
I've said to people across the state that, in terms of
economic analysis, WestConnex is a project that
can provide investment opportunities and boost
productivity. It makes the most economic sense, and
that's why we're getting on with it. It's hard to argue
with that logic.
You then ow onto other projects in the slightly
longer term, such as rebuilding Wynyard and Town Hall
stations for capacity, and extending the F6 motorway.
Once you have the challenges right and you have the
strategy, you need to consider how it can be funded
within the budgetary constraints.
The rst thing we must do is stick to our budget.
When you look at the data, you can see that the
culture of the former government was one in which
budgets didn't really matter; expenses blew out
by an average of $1.3 billion a year over 16 years.
We have changed that culture and come in on
average about $1 billion under projected expenses in
each of our three budgets.
If you're not controlling your budget, you're
limiting your ability to be exible in funding
infrastructure. Expense growth was more than seven
per cent when we came in, but we've now brought
it down to 2.7 per cent. We have brought expenses
down, and we've now got the capacity to fund
projects, because any uptick in the economy goes
straight to the bottom line, helping us to deliver the
infrastructure we need.
Improving the operating performance has also
led to a decrease in net debt: you can see that,
relative to the forecast debt we inherited, we're about
$9 billion under by 2014--15. We have taken some of
the pressure off our debt metrics, but at the same time
we want to put our foot down in relation to building,
and increase infrastructure spending over the next
four years, when we plan on investing about 38 per
cent more than the previous four years.
So a key part of our strategy is renewing our
balance sheet. This strategy has involved taking an
asset on our balance sheet, and using the asset to invest
in infrastructure: an asset for an asset. The approach
has been called social privatisation by a number
of signi cant industry gures and, importantly, it is
moving across the political divide. In fact, Paul Howes,
Above: The Hon
MP and the Hon
Mike Baird MP
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