NSW infrastructure announcement a step in the right direction
Finally some good news for NSW, with the newly elected government recognising that infrastructure spending is priority number one. For well over a decade infrastructure investment in NSW has all but been ignored, so last week’s budget announcement signals a much brighter future for an ailing NSW economy. Past governments have continually ignored that NSW was suffering from an inadequate supply of new homes, which in turn forced young families to relocate to other states in search of affordable housing and a better standard of living.
In the 2011-12 budget the government has committed $62.6 billion over the next four years, which they described as the biggest such commitment in the state’s history. A surplus of $292 million is forecast for 2012-13, and $156 million for 2013-14, with 2014-15 delivering a surplus of $152 million.
Finally NSW has an infrastructure map where not only the government but businesses and families can plan for their futures. All it took was an infrastructure vision.
Delivering his first budget Treasurer Mike Baird said: “A key part of rebuilding NSW is building the infrastructure our communities so desperately need. Nowhere in Labor’s infrastructure backlog felt more than in our hospitals which is why we have committed a record $1.08 billion to the health capital works program, along with $343 million set aside for new works.”
The budget invests $6.3 billion in infrastructure investment in roads and transport. Baird said: “The NSW government has increased spending on transport and roads infrastructure by nearly 10% on Labor’s last budget and we have invested more than $600 million on the northwest and southwest rail links. Since the election we have made good on our promise to fast-track the northwest rail link and today, we have backed those actions up with real money, with $314 million allocated this year to develop the line between Epping and Rouse Hill, including $222 million for land acquisition.”
Obviously this is a very expensive infrastructure spend, which explains the establishment of Infrastructure NSW, which has been set up to improve the way that infrastructure is assessed and delivered. Legislation has been passed to establish Restart NSW, the NSW Government’s key infrastructure fund of which one-third of all funding will be quarantined to deliver infrastructure in the regions.
The government has established Waratah Bonds, which are government-backed securities. The aim is to attract the mum and dad investors, which is excellent timing given what’s currently happening to world financial markets. Instead of selling public assets, Sydney’s Port Botany shipping terminal will be leased for 99 years as will the desalination plant at Kurnell.
To kick-start the floundering construction industry the stamp duty exemption will be limited to newly built homes only – as against the previous carrot for first home buyers where exemptions applied to all properties worth up to $600,000.
The last time Sydney had a big infrastructure announcement was back on September 23, 1993, when International Olympic Committee president Juan Antonio Samaranch announced from Monte Carlo that Sydney would be host for the 2000 Olympics. Our bid organisers budgeted $2.3 billion to run the Games, including $674 million on facilities and venues. In addition, the federal and NSW governments allocated $4.1 billion for transportation projects.
The $860 million makeover of Star City, which will now be called The Star, is Sydney’s first new five- star hotel since the Olympics which highlights the extent to which infrastructure in Sydney has frozen. I could add the Cross City and Lane Cove Tunnels which have turned out to be financial infrastructure disasters.
Finally, NSW has a structured infrastructure plan, and as they say in the movies, “I love it when a plan comes together.” Let’s hope that NSW becomes a box office hit again!
Robert Simeon is a director of Richardson Wrench Mosman and Neutral Bay and has been selling residential real estate in Sydney since 1985. He has also been writing real-estate blog Virtual Realty News since 2000. The RWM real estate model has sold in excess of $1 billion in database sales globally.
