Shifting the blame ... Barry O'Farrell. Photo: Kitty Hill
BARRY O'FARRELL is taking every opportunity to remind us NSW is in a terrible financial state.
He was at it again at the weekend, warning we are losing billions of dollars in GST each year, which has blown a $5.2 billion hole in the NSW budget.
The situation has become so desperate the Premier was moved to promote a solution usually regarded as political poison: an increase in the rate of the GST.
The comments are being described as ''manna from heaven'' for federal Labor, which has picked them up to launch a scare campaign against Tony Abbott.Advertisement
This has prompted many to ask what on earth had motivated O'Farrell. The answer is most likely to be political self interest.
When O'Farrell talks about a collapse in GST revenue, he is referring to money that has been forecast to be paid to NSW across the budget forward estimates.
The June budget showed GST to NSW is expected to increase by an average 4.6 per cent between 2011-12 and 2015-16.
The problem is global economic turmoil has sucked the confidence out of the national economy, so GST is expected to grow at a much slower rate than previously forecast, throwing the budget out of whack. That's why the state government announced last week that $1.7 billion had to be cut from education over four years.
The announcement was bungled and prompted a furious backlash from schools.
One possible reason for O'Farrell raising the GST question now is that he is seeking to reinforce the reason the cuts are needed.
But there is also another motive: shifting the blame to the federal government.
The question is whether the potential damage to Abbott's election campaign is worth getting this message across. For a Premier desperate to defend himself against angry teachers and parents, the answer is yes.
Tuesday, September 18, 2012
Barry O'Farrell's money talk may cost Abbott dear #nswpol