The treasurer said uncovering the major budget mistake was “yet another unwelcome fiscal setback for NSW”.
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“This is a material error that has real consequences for the budget,” Mookhey said.
“I’ve written to the auditor-general to notify him about this historical error in the state’s accounts. This adds to the economic headwinds the state budget is facing.”
The serious accounting error was discovered during the government’s property audit, which Premier Chris Minns ordered in May last year in a bid to find vacant blocks of public land that could be used to turn around the state’s flagging supply of new homes.
Minns directed all his ministers to ask their departments to audit their landholdings and identify surplus or under-utilised land parcels for rezoning.
Mookhey has told Auditor-General Bola Oyetunji that “we take these historical errors seriously”.
In his letter to Oyetunji, Mookhey said that the budget position for the Sydney Metro City and Southwest (CSW) project “has duplicated the recognition of asset sale proceeds for Integrated Station Development sites”.
The $21.6 billion Metro City and Southwest line under the harbour and CBD is due to open within months, and will be the second stage of the city’s expanding driverless train network.
Mookhey told Oyetunji that he was confident no other similar mistakes existed.
“Sydney Metro has confirmed this is the only Metro project that is net funded with proceeds of sale, so is not expected to have a replicated approach elsewhere in the Sydney Metro,” Mookhey wrote.
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“The result of this error is that Sydney Metro’s budgeted proceeds of sale were overstated, and the government’s budgeted net debt has been understated in budget publications since 2018-19.”
Mookhey said that while “the accounting treatment applied to Metro’s budget estimates would have been signed off by Transport for NSW and Sydney Metro at the time, the assurance processes undertaken by Treasury at the time are unclear”.
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