Why they're kicking an economy that's on its knees
 Ross Gittins
 November 17, 2008

The Rees Government's mini-budget is giving the state's ailing economy another blow to protect the Government's AAA credit rating. But is it worth paying such a price?

The mini-budget documents offer four reasons why it's so important to preserve the top rating. Let's look at them.

First, the higher its rating, the lower the interest rate the Government has to pay on its borrowings. It estimates that dropping one notch to AA+ would increase the rate it pays by 0.2 to 0.25 percentage points, which, within three or four years, would amount to about an extra $100 million a year.

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Ross Gittings calls it right... Government is like business... You need to provide stuff to exist. Should you cut the stuff to save money you end up in the doldrums. Most successful business-rogues would tell you "you trim expenses during the good times and reinvigorate the team with new smart players during the bad times". Stuff the ratings. But you need smart people who understand the dynamics of providing to a social network including those part you don't like, like the Spit Bridge. Most execs working in the city come from the northern suburbs, although some people are smart enough to stop at North Sydney... Spend moneys to fix the State hospital system and buy the press with entertaining free lunches — they don't have to cost the earth. Get the trains running on-time and more frequently and the idea of the single-deckers is not bad as long as there are plenty of it. Do not mothball new public transport system because of lack of fund, but delay the expenditure by side-tracking the investment in a smarter cheaper thinking till you know you've got enough balls to successfully commit... The idea of a zone in the city like in London is not a bad one but it needs to be clearly defined, to be better sold and be more savvy — not just designed to fill coffers, but to help the quality of life overall...  Lorries and trucks excluded from the restrictions.

Sure, Sydney's geography is a hard one to crack in some areas but suddenly smaller, more often and more efficient ferries and/or buses (12-18 people) can do the job, even under public ownership. Some decisions have to be made, not just to save money... Repairs, maintenance and improvements, without desecration is still a smart way to go. Some of which decisions have been very good, like giving Callan Park "back to the people"...

but I can see a cynical media, unable to steer away from being anti-whatever... The media has long decided it wants the other useless mob in charge... Thus nothing will ever be good enough. So, stuff the media AND the ratings, do the best possible job until booted out. Do it for New South Wales. You never know, you might survive...

mind you...

Facing Deficits, States Get Out Sharper Knives

LOS ANGELES — Two short months ago lawmakers in California struggled to close a $15 billion hole in the state budget. It was among the biggest deficits in state history. Now the state faces an additional $11 billion shortfall and may be unable to pay its bills this spring.

The astonishing decline in revenues is without modern precedent here, but California is hardly alone. A majority of states — many with budgets already full of deep cuts and dependent on raiding rainy-day funds or tax increases — are scrambling to find ways to get through the rest of the year without hacking apart vital services or raising taxes.

Some governors, including Arnold Schwarzenegger in California and David A. Paterson in New York, have called special legislative sessions to deal with the crisis.

Others are demanding hiring freezes and across-the-board cuts. A few states are finding their unemployment insurance funds running dry, just as the ranks of out-of-work residents spike.

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Gus: "we might need a bigger garbage truck"... or cleverer small steps.