In quick succession the Rees Government in NSW has lost the director-general of the Premier’s and Cabinet Department Robyn Kruk and now the director-general of Treasury John Pierce.
To paraphrase Lady Bracknell in The Importance of Being Earnest: “To lose one director-general may be regarded as a misfortune; to lose two looks like carelessness.”
Both these senior mandarins happily collected their $300,000-plus salaries — along with occasional performance bonuses — during the 13 years of the Carr and Iemma Governments.
Like rodents leaving a sinking ship, they have followed their erstwhile masters in a search for calmer — private sector — waters to earn a living.
Having presided in no small part in turning NSW into the nation’s economic basket case, Kruk and Pierce have quit the air-conditioned splendour of Governor Macquarie Tower leaving others to pick up the guano sandwich and eat it. Thanksalot — Public Service Medals are in the post.
By why the haste to get out? Heather Ridout, chief executive of the Australian Industry Group, supplied an answer in yesterday’s Meet the Press interview when she suggested, quite seriously, that Prime Minister Kevin Rudd appoint administrators to run NSW.
“I think Kevin Rudd needs to take NSW aside from the COAG (Council of Australian Governments) process and work out what we need to do to fix this state, and what conditions need to be put on it.
“A bit like an administrator going into a local council and saying, ‘Let’s have a look at the books, let’s have a really good look at what’s going on here and fix it’.”
Ridout’s remarks are mind-boggling. She has made the unflattering comparison between the NSW government and a bankrupt council and called for the remedy which faces every council that goes broke: the councillors are sacked, administrators are appointed and all decisions are taken by handpicked “three wise men” (They’re always male).
That’s what happened to New York City in 1975 when the Municipal Assistance Corporation (Big Mac) was put in charge to stop the Big Apple from sliding into bankruptcy and taking a large part of the US economy with it.
This is Ridout’s fear today. She said the policies of the Rees Government “definitely” were pushing Australia closer to recession and the NSW economy had become a national issue requiring separate attention.
“It is a third of the national economy, unemployment is highest here — well over 5 per cent now — its budget position is very ordinary,” she said.
Just over a week ago, Rudd appeared to acknowledge the scale of the NSW economic basketcase when he declared that the Rees Government should “lift its game”. But other senior Rudd ministers from NSW seem to believe that they can cruise to the next federal election in 2010 by pretending the NSW debacle doesn’t exist and/or is none of their business.
There’s a gorilla in the national economy and someone is going to have to get into the cage armed with a stun gun and a maxi-hypodermic needle. Could someone get Swanny on the line?
… So why not do a Kennett here in a diverse economy? Well even Gittins says we aren’t in the same category as Victoria, and not at all “bankrupt” as you suggest. Something about “less capacity to borrow than the national government … in the recession of the early 1990s” .
And politically all this Ayn Rand wishfull thinking a Kennett like figure will waltz in and wave his market forces wand is fairies in the garden stuff. Especially after the GFC. Kennett was out on his ear in 1999 and it was because he had the instincts of an obnoxious dictator. The clue is in Ridout calling to junk arbitration from IR, at least until Paul Bongiorno politely mentioned it’s only part of the Australian Constitution!
She’s good on ETS though – start in 2010 as rep for the Business Council of Australia. She knows it’s a global thing, only not as regards NSW economy. That’s a little inconsistent really.
What seems to be upsetting the political food chain as much as anything else is that Rees is nominal Left faction and is not ordained to have hands on levers. But this is the guy who delivered the $2B desal project and that’s one impacting lever. So the construction unions like that (even if I don’t). And he’s not a boomer, so the crusties in the Establishment don’t feel good about him. Too bad, boomers suck, they don’t trickle.
Sorry old bean, have to disagree with Ridout and the tenor of your piece here. On a minor point Gabrielle Kibble must have been administering one of the errant councils – may have been Liverpool. So not just a blokes preserve.
On the general tenor: The only thing that is certain in all this is that a GFC is real and the feds have lost $40 billion in budget projected surplus. Hence the stimulatory allocations such as $10 billion or half the real surplus, not simply projection.
Gittins as smh editor last Wednesday p1 said much of what you and Ridout on MTP 10 said (and she’s looking thinner and a bit hoarse I notice). That AAA rating is crap goal anyway, and state govt should be boosting including deficit in a sudden downturn if needed.
Trouble is Gittins and Ridout are probably wrong, and who do we have to rely on. Well Gittins nearly but not quite recants in his weekend column way back on p44 called “Why States should live with budget deficits”. But what is MOST revealing is the great and good brainy Gittins notes:
1. Wonky Ken Henry of fed treasury says AAA is still important for confidence in NSW at press club same day Gittins was in the lockup
2. NSW can’t play as national govt and splurge stimulatory billions because they don’t have the tax and revenue of the feds and NSW expenditure for such would just leak across border lines anyway
3. The fed govt does the national economy thing, the state does services.
4. The nsw can help with productive infrastructure including for jobs protection but the mini budget doesn’t change anything until 2011 so ‘its too far away to worry about’
And on it goes. It’s quite a climb down actually. And it shows Ridout didn’t read her business section of the weekend herald quite as close as ought to have before comparing all of NSW with the ALP Right grubs at Wollongong.
And then we have Sydney as finance sector dependent on the vagaries of the GFC. Well why aren’t we like Kennett’s Victoria, Ridout poses. …
FYI,