TAHE artificially bolsters budget and compromises safety according to leaked PwC report commissioned by the NSW Government
The NSW Auditor-General recently decided it will conduct a performance audit into the Transport Holding Asset Entity (TAHE) after a leaked PwC report revealed that corporatising the state’s transport networks was deemed the best option to plug a multi-billion dollar budget black hole from the shell corporation created by the NSW government.
The NSW government seriously considered commercialising the entire public transport and road networks to artificially inflate the state budget by hiding billions of dollars in costs. The report shows that commercialising the entire transport network would not adversely impact customers but could create tensions in the organisation between safety and turning a profit.
A Herald investigation revealed in June that TAHE was set up in 2015 to enable the government to hide the costs of the state’s rail system. However, changes to Australian accounting standards in 2018 meant that TAHE had to show it was truly independent of the government and turning profits. If it failed to do this, it would cost the budget $2.4 billion a year, according to the PwC report. The confidential PwC report shows NSW Treasury officials went as far as requesting special exemptions from the country’s accounting standards board to prop up the budget.
To avoid the budget hit, PwC considered five business models for TAHE and Transport and Treasury settled on the corporatisation of the entire network as the “preferred option”.
But it warned that corporatising the entire transport network faced a series of “high risk” roadblocks, including upheaval of the transport agency’s heavily unionised workforce, potential safety risks and political opposition.
“The fact that the state government is willing to gamble on safety in the name of bolstering the budget is a serious concern… for our public transport system, our jobs, and the general public.” says RTBU Locomotive Divisional Secretary, Farren Campbell.
“Here we have two consulting firms coming to the same conclusions and flagging the same concerns about the Transport Holding Asset Entity. Despite this, the government continues to deny that retaining TAHE is unsustainable.
“It’s alarming that the government continues to flout advice in the name of profit, potentially leaving taxpayers worse off and the network less safe.”