Questions raised about sacking of NSW transport boss and state budget cover-up

By Shannon Jenkins

June 2, 2021

NSW public service commissioner Katharina Lo would not have endorsed John Barilaro if she knew then what she knows now. (AAP Image/Bianca De Marchi)

A former New South Wales auditor-general has accused the state government of using an ‘accounting gimmick’ to artificially inflate its budgets by tens of billions of dollars over six years.

An investigation by the Sydney Morning Herald has revealed the state government had sought to cover up the inflation, and has raised questions about the sacking of a senior public servant.

The state government had used the Transport Asset Holding Entity (TAHE) — a shell corporation that was established in 2015 and officially became a statutory state owned corporation last year — as part of its plan.

The entity was formerly known as RailCorp, a state government agency that ran the metropolitan rail network. The agency was scrapped in 2013, when current Premier Gladys Berejiklian was transport minister.

According to the Herald, NSW Treasury had used the TAHE to hide a budget deficit in 2018, in what former NSW auditor-general Tony Harris has described as an ‘accounting gimmick’ and a ‘financial mirage’. He has estimated that the plan has boosted the state’s operating result by more than $30 billion over the last six years.

The state government had placed the costs of the rail network onto the TAHE. But last year, a KPMG transport review commissioned by Transport for NSW had predicted that the TAHE would end up costing the budget $5.3 billion over 10 years.

Documents have shown that the Treasury urged KPMG to remove the damning findings from the report.

Transport secretary sacked amid fight over report

The investigation has also raised questions over the dismissal of former Transport for NSW secretary Rodd Staples.

Staples was terminated without reason or notice last November. It has been revealed that, in the days leading up to his dismissal, Treasury and KPMG had both contacted Staples regarding the review. Treasury had claimed the report contained errors, while KPMG had defended the report.

In light of the revelations, former counsel assisting the NSW Independent Commission Against Corruption Geoffrey Watson has called for the ICAC to investigate Staples’ dismissal and the budget cover-up.

Labor MP Michael Daley has accused Premier Berejiklian, treasurer Dominic Perrottet, and transport minister Andrew Constance of all being in on the cover-up.

“This may be the most dishonest budgetary fraud ever concocted by a NSW state government and it goes all the way to the top,” he wrote on Twitter.

“The NSW budget has been based on a massive lie for years.”

READ MORE: NSW transport secretary sacked without reason


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