NSW Treasurer will face tough task saying ‘no’ to colleagues on spending  SMH  - Alexandra Smith   June 20, 2023

Treasurers are well versed in saying no. In the lead up to all state budgets, there is a revolving door of ministers through a treasurer’s office to argue the case for extra money for their portfolios.

In any budget, it is a fine balancing act between what gets approved and what misses out. However, as Treasurer Daniel Mookhey has made abundantly clear, deep cuts will define his inaugural budget, which will be handed down in September. He will say no far more readily than yes.

Treasury Daniel Mookhey delivered his first major economic update to NSW Parliament on Tuesday.

Mookhey inherits a budget with significant challenges. The state is still hurting from a once-in-a-generation pandemic that resulted in revenue falling and expenses ballooning. At the same time, inflationary pressures are biting, and interest rates are a major contributor to cost of living stress.

The new treasurer, just three months into the job, delivered his first major economic update on Tuesday. And while he is not laying all the blame for the gloomy outlook at the feet of the former Coalition government, he is certainly not letting them off the hook.

He and Premier Chris Minns have acknowledged that the shock of COVID-19 rightly forced the former government to spend. However, the cash splash seemingly did not end, according to Mookhey.

In their last 14 months in office, Mookhey says the former Coalition government added $33.9 billion of expenses to the forward estimates. “No government of any political persuasion has spent faster than they did in living memory – except in times of war or emergency,” he told parliament on Tuesday.

Government spending of that size cannot continue. In fact, it needs to be significantly scaled back.

However, in his quest to ease inflationary pressures, Mookhey finds himself in a bind. On the one hand, he is right to insist that states need to be restrained when it comes to spending. To do otherwise will fuel inflation.

At the same time, Mookhey will have to cut spending on services, the bread and butter of Labor. That will present its own set of internal challenges, which he is clearly anticipating.

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“When we test every spending decision we have inherited against these principles, we expect conflict,” Mookhey told parliament. “After all, every project once had a sponsor who was a fervent believer in their proposal.”

Mookhey has made sure his warning to voters is as ominous as possible, which includes a very real threat to the state’s prized AAA credit rating. His own team will also need to heed his warning. As ministers turn up to his office to plead their case for cash in the looming budget, they should brace for one word: No.

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