by Sam Roggeveen
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16 June 2009 4:18PM
The Government of New South Wales has caved in to the union movement and enacted protectionist measures in its latest budget:
The office of the NSW Treasurer, Eric Roozendaal, yesterday confirmed the budget would offer local firms a 20 per cent premium in bidding for tenders compared to foreign bidders. The policy is expected to apply to about $4 billion worth of goods and services supplied to the Government, which insists the measures will not breach World Trade Organisation rules. Mr Roozendaal conceded the policy could lead to "some increased cost", for the Government. "But frankly, if it is going to support local jobs … we think it's appropriate," Mr Roozendaal told Sky News.
$4 billion is a modest sum in national terms, but if, as federal Trade Minister Simon Crean warns in the same article, this move encourages Australia's trade partners to adopt similar measures, the cost will be much higher.
Apart from the material damage, the symbolism is atrocious. Successive New South Wales Governments have branded the state capital, Sydney, as Australia's 'world city'. Decisions like this one make a mockery of that claim.
