The NSW Premier, Barry O’Farrell, has claimed that the $4.5 billion ‘black hole’ in the State’s finances left by the former Labor Government has blown out by an extra $759 million.

 

Mr O’Farrell said a special audit of the State’s budgetary position, conducted by Acting Treasury Secretary Michael Lambert, confirmed the State’s finances had deteriorated by $4.5 billion since the mid-year review last December.

 

Mr O’Farrell and the Treasurer, Mike Baird, said the audit had also found that an additional $759 million was needed to cover unfunded costs of the Solar Bonus Scheme.

 

“In other words, the black hole Labor has left the people of NSW has now blown out to around $5.2 billion,” Mr O’Farrell said. “And I fear it could grow even further as we continue to review other financial issues – such as unfunded superannuation and outstanding liabilities - in the lead up to the Budget.

 

The government has suspended the Solar Bonus Scheme, with the result that people who have installed solar panels on their roofs expecting to get a tariff of 60 cents per kilowatt generated will now receive only 20 cents.

 

Mr O’Farrell said the failure to take the additional budget impact of the Solar Bonus Scheme into account could only have occurred if Treasury advice on the scheme’s impact was either not sought, or was ignored.

 

Mr O’Farrell said the audit uncovered further evidence that Labor had “cooked the books” to distort the true state of NSW’s finances. He said Labor had used a process known as “smoothing out” to turn a deficit into a surplus. He said the former government had directed Treasury to move rail capital grants from one year to the next.

 

The Audit of State Finances, Part 1 is available at http://www.treasury.nsw.gov.au/