The government set up TAHE to shift billions of dollars in transport costs off the NSW budget bottom line. However, a dispute over the accounting treatment of the entity led to the government writing down the value of TAHE by $20 billion and injecting billions into the rail corporation in late 2021.
Ms Crawford said TAHE must generate a specified rate of return for government spending on the entity to be kept off the budget bottom line. To meet that rate of return requires a “money-go-round” because 80 per cent of TAHE’s revenue comes from Sydney Trains and NSW Trains, which are funded by the NSW government.
“In order to pay access and licence fees to TAHE, Sydney Trains and NSW Trains need additional funding from the government,” the report states.
“These agencies then pass that money on to TAHE in the form of access and licence fees and, in turn, TAHE uses some of that money to pay dividends to the government, thereby resulting in an outcome that has been described in advice to decision-makers as a ‘money-go-round’.”
Ms Crawford’s findings, released on Tuesday afternoon, are also a vindication for Labor’s shadow treasurer Daniel Mookhey, who has criticised the creation of TAHE as an “accounting trick” to deliver a budget surplus for the Coalition government.
He has vowed to abolish TAHE and place the state’s transport assets back into Transport for NSW if Labor wins government next March.
“TAHE is a budget con that’s turned into a fiscal bomb. It is responsible for a looming $10 billion budget black hole that will detonate the state’s finances, if Mr Perrottet is re-elected,” Mr Mookhey said. “The premier will have to cut spending in our schools and hospitals to save this accounting sham from falling over completely.”
Requests for comment from NSW Treasury were directed to Treasury. Comment was sought from Treasury.
