When Mike Baird fronted the NSW people five years ago and told them he wanted to sell off their electricity poles and wires, cynics thought he’d never convince them.
But Baird was the master salesman.
His pitch was to hang up the For Sale sign around NSW — a plan that would eventually net the state $34 billion for the sales of electricity poles and wires and other assets.
Labor embarked on a fierce scare campaign about selling the electricity network to international actors, but Baird prevailed.
The spoils went far and wide, injecting NSW with enough money to ride high on economic good times as major projects like the Sydney Metro City and Southwest, Parramatta Light Rail, WestConnex and the Western Sydney Stadium were funded.
Jobs, investment and construction were plentiful.
Treasury estimates now that the current $93 billion pipeline of infrastructure projects is driving 110,000 jobs a year over the next for year.
But wait. What happens when the cash runs out? What happens when the music stops playing?
Because that’s exactly what we’re on the cusp of — and it’s going to happen against an already soft economy.
The fear of Sydney stalling is already being quietly voiced in engineering firms and urban planning offices.
A slew of big projects going forward remain unfunded.
The onus now is on the Berejiklian government to activate phase 2.0 of the great building Sydney dream.
Treasurer Dominic Perrottet is unequivocally committed to continuing the state’s infrastructure story.
Speaking in his Parliament House office this week, Perrottet told me the had no intention to take his foot off the pedal when it came to building future infrastructure projects.
“We are rebuilding Sydney. We are taking our city from good to great. We’re building not just for now but for the future generation,” he said.
He conceded there were several big unfunded projects waiting in the wings and did not shy away from finding money for them.
It won’t be easy. The economy is lagging and when Perrottet hands down the mid-year budget update in coming weeks, it is likely there will be writedowns.
This means future projects will be funded through a combination of borrowing more money at low rates and selling off assets.
Many people will be questioning whether it makes sense, too, to sell off assets such as WestConnex in an attempt to avoid debt at a time when money can be borrowed at historically cheap interest rates.
Spoiler alert — they are likely to borrow as well.
Perrottet is relaxed about debt even as he faces a $38 billion debt bomb over the forward estimates. On the one hand, borrowing rates are almost criminally cheap, and then on top of that he has the security of his future fund which he created two years ago and will hold $29 billion by 2029.
It was Baird who embraced the term “asset recycling” — a pivot away from the politically poisonous term “asset sales” which had seen Queensland Premier Anna Bligh come undone.
Baird’s concept was that assets are never just sold — the money is recycled into new assets, allowing the state to continue to grow in value.
In this sense, it’s running the state like a corporation that’s in the business of constructing infrastructure, selling it, and then using the proceeds to build more of the stuff.
This economically astute concept allows politicians to sell the benefit of the transaction, which is important because Labor will mount a strong attack should private operators be seen to be doing a worse job than government.
Think the controversy over the land registry, or the threat of industrial action over privatised bus services in the Inner West.
Earlier this year, speaking of Baird’s poles and wires sale, Premier Gladys Berejiklian remarked “would you look out the window and own the electricity pole on the corner, or would you rather us build a new hospital up the road?”
Her political calculation is that the answer is simple.
The government is already doing a scoping study which paves the way for selling its forestry corporation assets.
You’d be wise to expect the remaining stake in Sydney Motorway Corporation will also go under the hammer, which requires no legislation and therefore no messy political fight.
After that, it gets harder.
The Nationals will have a brawl with the government if it tries to sell off the bush-based Essential Energy.
A further sale of Ausgrid requires legislation and the government will face a hostile upper house.
Selling off water assets would be politically poisonous in the current climate of drought.
Perrottet and Berejiklian have their work cut out for them.
Sydney must keep moving. There is no doubt about that.
The government has built its legacy on driving growth and it knows full well that it can’t afford to stop now.
It’s never easy to convince voters you want to sell off their family heirlooms, but this government has done it before.
Doing nothing is not an option. Sydney must continue to grow and this is even more important as the economic headwinds blow.