Asset recycling key to fund required infrastructure: NSW Premier

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Posted : Friday, July 18, 2014

The NSW Government needs a mandate to fund and implement the State's infrastructure needs, NSW Premier, the Hon. Mike Baird has told CEDA's State of the State forum in Sydney.

Mr Baird said that through the government's asset recycling strategy, the State has gained $6.7 billion from the lease of Port Kembla, Botany and Newcastle.

However, the potential exists for more capital to be raised from other asset recycling, such as the State's poles and wires.

"That's why we're so determined to put it to the people of NSW; we need to win a mandate to secure it, and if we do we're ready to go," he said.

Mr Baird said he expects scare campaigns about electricity prices increasing but he isn't concerned because the facts tell a different story.

"When private investment (of electricity networks) came into Victoria and then came into SA, the costs of their networks, since that day until today, has gone down in real terms," he said.

"In NSW, costs in real terms went up 122 per cent.

"The story is quite compelling, when private sector investment has come in, the cost of those businesses in real terms have gone down.

"That has meant lower prices for businesses and consumers in those states."

On the state budget Mr Baird said the underlying financial position has significantly improved, in part from the government's asset recycling strategy.

The State's net debt, which was close to $20 billion, has decreased to $8.6 billion, he said.

Mr Baird also said maintaining the State's triple-A rating is a key government priority.

The biggest challenge to maintaining a sustainable budget would be health, as the largest and fastest growing cost, he said.

Under the current Federal Budget, the percentage absorbed by the Commonwealth has reduced from just under 40 per cent to 25 per cent, Mr Baird said.

"That is not sustainable, a state government cannot absorb that," he said.

"The only way we can solve that is by doing it together and that has been acknowledged by the Federal Government.

"We look forward to those discussions because that is obviously a challenge that will take a considerable amount of time and effort but it has to be done collectively."

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