Olympic debts gut NSW budget surplus
by Peter Mac NSW Labor Treasurer Michael Egan has achieved a surplus of $380 million in this year's State budget, despite workers having prevented him from selling off the State's electricity industry last year. Nevertheless, all is not rosy in the Treasurer's garden. Housing construction in NSW, as in other states, is expected to experience a sharp downturn as prospective home owners struggle to cope with the massive impact of the GST. The Egan budget has included a substantial cut in stamp duty for first home buyers, in order to stave off the housing slump. The budget also includes a cut in payroll tax, in the hope of stimulating the economy, something that employers have been calling for for some time. However, big business representatives received this generosity with their usual surly ingratitude. The State's shadow Treasurer, Peter Debnam, equated such handouts to business with improvements in the State's economic competitiveness, declaring that the payroll tax reduction should have been seven times greater, and stamp duties abolished altogether! The biggest problem confronting NSW however, is the Sydney Olympics which have already swallowed billions of taxpayer dollars. $100 million blowout It is now expected that the Olympics bill will rise by the best part of $100 million. This staggering overrun has been attributed in part to the loss of lucrative sponsorship deals, even though alternative arrangements have now been made with some other sponsors. (As a consequence we will doubtless again witness contestants acting as advertisements for various companies throughout the Games.) The NSW Government has also announced cost increases of $10 million for contract security and police services, and $18 million for transport although rail workers are unlikely to see any of that! (See other Olympic story page 1). There is a massive $33 million extra going to the Olympic Coordination Authority for organising construction and venue fitouts. $100 million must now be found to prop up this monolithic event. "No worries!" says Treasurer Egan, who has decreed that the $30 million the Games was supposed to yield for the people of NSW will now be used to meet part of the extra costs. Now you see it, now you don't! Egan declared that he could "handle any slide over expenditure" by allocations from the cash surplus and contingency funds. Good news for Olympics contractors, but bad news indeed for the hard-pressed people of NSW.