Dominic Perrottet and his government have copped brutal criticism after a major report revealed a $5.2 billion blow to the NSW budget.
The state’s Auditor-General has accused Treasury of presenting inaccurate forecasts, forcing the government to lift its contribution to a controversial fund.
Treasury has been slapped with an “extreme risk” finding by the NSW Auditor-General and urged to clean up its act.
The criticism stemmed from the government’s accounting of money related to a public fund known as the Transport Asset Holding Entity.
The fund is focused on future rail assets.
Auditor-General Margaret Crawford said in her new report Treasury provided “late, unsophisticated, and inaccurate forecasts” about the profitability of TAHE to her office.
“This year’s audit was significantly delayed by protracted disagreement over the treatment of the government’s cash contribution to TAHE,” she wrote.
“This matter was further frustrated by the fact that information was withheld and not shared with my Office on a timely basis.
“This has warranted an extreme risk finding for NSW Treasury to significantly improve governance processes to ensure complete and timely sharing of information.”
The report said Ms Crawford warned the government last year she wouldn’txjmtzyw be able to sign off on the state’s finances without qualification, meaning the numbers wouldn’t have added up.
The government responded with a flurry of action in mid-December, including the injection of an extra $5.2 billion in taxpayer money into TAHE.
“The additional funding will extend beyond the term of the current government. The effects will predominantly be borne by future governments,” Ms Crawford noted.
Ms Crawford also said the “extraordinary” challenges of completing the audit “tested the constructive partnership between the Audit Office and NSW Treasury.”
The report also said other government agencies had made accounting errors worth a total of $6.6 billion, a “significant increase” from the previous year’s error margin of $1.4 billion.
Labor’s Daniel Mookhey said it was the most “severe lashing” of a government he’d ever read.
“It’s clear that government and Treasury were engaging in misleading and deceptive conduct as they raced to stop the TAHE from detonating the state’s budget,” Mr Mookhey said.
“The tactics of withholding information, and providing the auditor-general with misleading answers are despicable … those responsible need to lose their jobs.”
A consultant involved in setting up an operating model for the rail corporation has previously told a parliamentary inquiry Treasury “essentially made up the benefits” it used to prove the viability of TAHE.
The inquiry will hold a further hearing on Thursday.
TAHE is a for-profit state-owned corporation managing rail assets that replaced a prior non-profit entity.
The rail corporation charges the train operators Sydney Trains and NSW Trains to use the rails and trains, and the report said it gets 80 per cent of its revenues from government contracts.
Mr Mookhey claimed TAHE could become “the worst fiscal disaster to hit NSW in living memory”.
“TAHE will cost the state more than $13 billion by the end of this decade,” he said.
“Taxpayers will have to throw even more good money after bad to pay for the Premier’s attempt at budget deception.”
