The Hon Mike Baird MP
New South Wales has become a strong example to all states and territories of what can be achieved by selling existing assets and using the proceeds to fund new infrastructure, says New South Wales Treasurer, The Hon Mike Baird MP. The challenges I want to address the question: Why isn’t more infrastructure being built across the country? What you see is a range of challenges across the states, but I believe that there are some solutions. I want to present some of the challenges, and talk about some of the solutions and the opportunities for those in the sector. When we came into government, the infrastructure deficit, which was determined by Infrastructure NSW, was $30 billion over the next 10 years. The debt profile was $55 billion and rising. Obviously, with that rising profile, both in terms of infrastructure needs and debt, the threat to the AAA credit rating was very apparent. Indeed, our
incoming brief from Treasury made it clear that the AAA rating would be lost unless we took action. Before the global financial crisis, you might have been able to debate the necessity of retaining the AAA rating. After the GFC, there is no debate. The cost is significant. We saw it when Western Australia lost its credit rating just recently, and its 10-year bonds blew out by close to 30 points. Queensland had similar downgrades, and it got up to 60 points. Somewhere between 30 and 60 points for 10-year money, on $60-70 billion in debt, you start to understand the financial challenges. And that’s before you can put a dollar into infrastructure. You would have to find the additional money for the cost of your debt, not to mention the issues that a Volume 4 Number 1
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