• Premier Baird’s train sell out to cost NSW economy $455 million
  • New report reveals cheaper to manufacture in Australia
  • More than 600 jobs wasted in vain 

A new report by the Centre for Future Work shows the Baird government’s decision to send building of a new intercity train fleet offshore will cost the NSW economy almost half a billion dollars.

The Baird government awarded a $2.3 billion contract for 512 new intercity passenger rail cars to a Korean company claiming this was "cheapest". 

But Jim Stanford, Economist and Director of the Centre for Future Work said they ignored the negative impact of the decision.

“Governments purchase many billions of dollars of goods and services from private firms.  But should their main goal be to get the cheapest price possible?  Or should it consider other goals – like job-creation and environmental and labour standards?

“A complete cost-benefit analysis should take those broader impacts into consideration.  And governments shouldn’t just try to “buy cheap.”  Rather, procurement decisions should aim to maximize net benefits to the whole economy.”

The report documents the economic importance of railway equipment manufacturing in Australia (5000 direct jobs and many more in supply industries).  And it shows that offshoring the railway cars could deprive Australian governments of $455 million in forgone revenue – due to lower GDP, employment, and incomes. 

“That is more than any extra cost associated with manufacturing the equipment in Australia.  At a time of high unemployment at home, the Baird government sends this valuable work to Korea.  Ironically, it will hurt its own budget in the process.”

Read the full paper here. The official launch of the Centre for Future Work is on Thursday October 6, from 6:30 pm, Atrium, Sydney Trades Hall.

 

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