Friday, September 5, 2008

Michael Costa dumped

NSW Treasurer Michael Costa has been dumped by the Premier.

Mr Costa said that he had been advised last night by Morris Iemma that he was "not on his ticket'', in reference to the names of those to be included in the new cabinet, which is expected to be announced later today.

The outgoing Treasurer was feisty to the end.

He said at a press conference this morning that the Premier had shown enormous courage in taking on the issue of electricity privatisation.

He said that personally, it had been easy for him because conflict is not a problem for him.

Mr Costa told reporters some of them might argue he thrives in that environment, but he had not felt the stresses surrounding the row over electricity privatisation as emotionally as other people involved in the issue.

He also detailed his concerns over the state's ability to retain its Triple A credit rating, saying state revenues are being undermined by the slowing Australian economy.

As well, Railcorp was seeking another $3 billion to spend on new upgrades, Mr Costa said.

"That is clearly not sustainable.''

Mr Costa said the state now had no choice but to delay the proposed North-West Metro project if it was to avoid losing its Triple A credit rating in the coming months.

He said NSW is facing a dramatic drop in revenues from stamp duty approaching $200 million in the first two months of the 2008/09 financial year, as a result of the economic slowdown, while also disclosing that the state is faced with a dramatic blow-out in the health budget running to hundreds of millions of dollars.

"My issue is with the funding of the North-West Metro costing $12 billion  which is not sustainable unless we cut spending in other areas - our health and education programs,'' Mr Costa said.

Mr Costa said he had been advised that the health budget has blown out by $300 million so far this financial year, which is clearly not sustainable, saying that health spending is over-committed by $500 million.

He blamed a lack of reform "at the state and the federal level'' for the blow-outs faced in areas such as health.

Mr Costa was Minister for Economic Reform from the start of 2005, and was appointed Treasurer in early 2006, taking the portfolio from the Premier, Morris Iemma.

Prior to that, he had been Minister for Police and Minister for Transport, along with holding several minor portfolios.


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