There is a desperate need to invest in public services infrastructure in NSW. Lack of spending has led to ongoing scandals in the hospital system and the deterioration of public transport.
The government claims that increased borrowing would see NSW lose its AAA credit rating and the confidence of international credit markets. But according to Sydney University economist Bob Walker, debt used to fund infrastructure would be balanced by the new government assets created. Levels of government debt are at historically low levels.
According to Walker, even dropping to a AA rating would add a minimal amount the state’s borrowing costs. As the biggest state NSW could comfortably borrow to fund new infrastructure projects.
There needs to be a break with the logic of economic rationalism, which has led to hospitals and schools being starved of funds while public-private partnership deals have put hundreds of millions into the coffers of the likes of Macquarie Bank.
Meanwhile the State Labor government could wage a campaign for the Federal government to use some of its $30-odd billion surplus to build a renewable energy power station in NSW and provide money for public transport infrastructure and schools.