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Tuesday, September 6, 2011

New South Wales Budget 2011

NSW Treasurer Mike Baird

NSW Premier Barry O'Farrell is going to increase mining royalties in the budget today to offset the cost of the carbon tax but the Federal Government will be livid because it will cost them around $1 billion. Mr. O'Farrell says the carbon tax will cost NSW around $950 million over the next four years and like Western Australia, the booming mining industry will help pay for it.

It seems the NSW Liberals are also guilty of breaking promises - in May when WA Premier Colin Barnett said he was going to increase mining royalties, Mr O'Farrell assured Julia Gillard they would not follow suit. In hindsight, it wasn't a great deal for the government, royalties for coal now range from 6.2 to 8.2 per cent and the Commonwealth has promised to reimburse miners for their state taxation liabilities.

Federal Treasurer Swan was furious when WA made their announcement and threatened to hold off billions of dollars in GST payments and help with infrastructure funding, and he's likely to feel the same way now about NSW.

NSW Treasurer Mike Baird will also increase the climate change levy payable by utilities. But after the mess Labor made of ruining the state of NSW, it's not surprising that drastic cost-cutting measures need to be taken to help fix it - naturally there will be a deficit this year and hefty cuts to public service jobs. O'Farrell has to honour his promise to build the north-west rail link and somehow find $2.5 billion to pay for it over the four years.

Meanwhile, a 2.5 per cent cap on public sector wage increases is likely to cause havoc - teachers plan to go ahead with their 24 hour strike on Thursday and they will be joined at the Domain by firemen and nurses in what they have called the "Day of Chaos Rally".