Economist.com Cities Guide: Sydney Briefing - June 2006

News this month

Budget blues

After six years of boom following the 2000 Olympic Games, Sydney's economy may have lost its shine. The projected growth rate in 2006-07 for New South Wales (NSW), of which Sydney is capital, is 2.5%, lower than the 3.75% for the rest of Australia. Delivering the annual budget on June 6th, the government of NSW announced a deficit of almost A$700m ($523m) for 2006-07. Much of the shortfall can be blamed on pre-election sweeteners from Morris Iemma, the state Labor premier, before voters go to the polls in March 2007. The government has borrowed to invest in transport, hospitals and schools, and a downturn in Sydney's property market has cut revenue from taxes on property transactions.

The budget announcement followed more bad financial news a few days earlier, when John Howard, Australia's conservative prime minister, announced that the federal government was scrapping plans to sell Snowy Hydro, a hydro-electricity system in southern NSW jointly owned by the federal government and the state governments of NSW and Victoria. The NSW government has a 58% stake in the system, and so it stood to gain a substantial share from the A$3 billion sale, but Mr Howard said he was responding to protests from politicians and farmers. “The Snowy” is seen as an Australian icon, and many were against it falling into foreign hands. But critics of Mr Howard, himself a Sydneysider, suspect he saw killing the sale as a chance to compromise the NSW Labor government, which was relying on its proceeds to underwrite its budget. Labor has enjoyed an 11-year hold on power in NSW, Australia's most populous state.

Digging deeper

Sydney's Cross City Tunnel is continuing to cause controversy. When it opened last August, it was touted as the answer to central Sydney's congestion problems, capable of taking up to 90,000 vehicles a day. But the tunnel, which runs from Darling Harbour in western Sydney to Rushcutters Bay in the east, has attracted only about one-third of that number. Some motorists object to the high toll (A$3.56), while others complain that non-tunnel crossings are now less convenient because nearby local streets have been closed. On June 4th the New South Wales state government responded that it would reopen 13 such streets to allow more routes through the city.

But in trying to solve one problem, the government may have created a greater one. Cross City Motorway, the company that operates the tunnel, has signalled that it may sue the government if it reopens the streets. The company had already tried to attract more motorists by halving the toll for three months to June 5th, with limited success. If the government is legally forced to pay damages for a private-public partnership already out of favour with the public, the political backlash at the state parliamentary election next March could be severe.

An uncivil affair

John Howard, Australia's prime minister, has moved against the country's first law allowing same-sex couples to form civil unions. In May the legislative assembly in the Australian Capital Territory (ACT), the region comprising Canberra, Australia's capital, passed a law allowing formal recognition of same-sex partnerships. But on June 13th Mr Howard intervened, claiming that the law equated civil unions with marriage in unacceptable fashion. Under a statute that gave the ACT self-government in 1988, he asked Michael Jeffrey, the governor-general, who represents Queen Elizabeth, Australia's head of state, to overturn the law.

Mr Howard's move has provoked a furious response. “We're appalled. Mr Howard’s action is arrogant, undemocratic and displays contempt for the ACT's power to make its own laws and for the principle of equality before the law”, said Simon Corbell, attorney general in the ACT's Labor-led government, to Economist.com. On June 15th, opposition parties in the Senate, the federal upper house, tried to overturn the governor-general's disallowance of the law. Gary Humphries, a member of the conservative Liberal Party, which Mr Howard leads (and a former ACT chief minister), crossed the floor to support their motion, which still failed narrowly, by a margin of 32 to 30. The ACT government says it will introduce a revised version of its civil-union legislation later this year.

Nine's lives

Things are tough at Channel Nine, the Sydney-based commercial television network that was the centre of the empire of Kerry Packer, an Australian media mogul. Since Mr Packer’s death last December (see obituary), his son and heir, James, has set about trimming costs at the channel. On June 6th Publishing and Broadcasting, the family company that owns Nine, announced that it was cutting 100 jobs from the network’s staff of 450 in six news and current affairs programmes. A ratings leader for most of its 50-year life, Nine has recently slipped to second place behind Channel Seven in the crucial 6pm evening-news slot. Since 2002, Seven’s news ratings have risen 24% compared with a 17% drop for Nine.

This move is quite unlike the style of the late Packer, who was famous for throwing money around to keep the network ahead in the ratings war. Some pundits see the cuts as a sign that James Packer is prepared to sacrifice ratings for revenue as he builds the company's investments in new media and gambling.

Ball of a time

Traffic in central Sydney ground to a halt on the night of June 12th as thousands took to the streets to celebrate Australia’s 3-1 win against Japan in its first opening-round match in the football World Cup in Germany. Pubs in the city centre, Paddington, the Rocks and Darling Harbour erupted as the “Socceroos” snatched victory from the jaws of defeat by scoring three goals against Japan, the Asian champion team, in the last seven minutes of the game in Kaiserslautern. Scenes of wild jubilation were repeated in other cities around the country.

The win was as much symbolic as sensational: it was Australia's first-ever match win in the World Cup finals and its first World Cup appearance since 1974. It also signalled the arrival of soccer (as the game is still known in Australia) in the consciousness of a country where rugby league, rugby union, Australian Rules football and cricket reign supreme. The appointment last year of Guus Hiddink, a Dutchman, as the Socceroos' coach helped to turn the team's fortunes around, and Australia entered the Asian Football Confederation last year. Even if the Socceroos do not progress to the next round of the tournament (they lost 2-0 to Brazil on June 18th and face Croatia on June 22nd), their win against Japan will be remembered as highpoint in Australia’s sporting history.

Catch if you can

June 2006

Biennale of Sydney 2006

Until August 27th 2006

For the 15th time since 1973, this sprawling festival of contemporary art and performance takes over Sydney for the winter season. Charles Merewether, the director, has assembled a staggering array of paintings, photographs, sculptures, installations and projected works from 85 artists in 44 countries, and many are being exhibited for the first time. Sixteen venues across Sydney are hosting the works, but you need not stray far from the leading galleries in the city centre to see the best.

Ai Weiwei, a Chinese artist (and an architect of Beijing’s Olympic stadium), is showing a giant 3D map of the world at the Art Gallery of New South Wales. The Conch, a Pacific island theatre company from New Zealand, is performing “Vula” (pictured), a visually profound piece about Pacific women, on a stage flooded with water. Other venues include the Museum of Contemporary Art and Pier 2/3 at Walsh Bay.

Tel: +61 (0)2 9368 1411. Visit the official website.

More from the Sydney cultural calendar