Mike Baird quits while the going is good

Advertisement

By Leith van Onselen

Breaking via The Australian:

NSW Premier Mike Baird will resign from politics next week, triggering a by-election and handing over the leadership of the state Liberal Party after less than three years.

Mr Baird, who was expected to reshuffle his cabinet early next month, said he had instead decided to resign.

“As I have reflected on the approaching halfway mark of our current term of government, and the opportunity it presents to refresh the cabinet team, I have decided that this is the perfect time for me to hand the reins over to a new premier,” Mr Baird said in a statement this morning.

“Next week there will be a Liberal party-room meeting and a spill of leadership positions.

“Following that meeting, I will resign from parliament, effective immediately.

Mike Baird has timed his exit perfectly, in my view, with the NSW economy currently at a cyclical high on the back of the booming property market and strong immigration, and the state Budget awash with stamp duty receipts.

There’s only one way to go from here, however, and that’s down.

Advertisement

Sydney house prices are an unquestionable bubble and nearing the end of the growth cycle. The construction cycle will likely peak over the next 18 months:

ScreenHunter_16956 Jan. 19 07.23

And NSW stamp duty receipts already look to have peaked on the back of falling transaction volumes (offsetting still-rising prices):

Advertisement
ScreenHunter_16351 Nov. 29 08.33

It’s a good move for Baird to retire mid-term rather than in two year’s time, when the NSW economy and Budget will likely have turned down.

[email protected]

Advertisement
About the author
Leith van Onselen is Chief Economist at the MB Fund and MB Super. He is also a co-founder of MacroBusiness. Leith has previously worked at the Australian Treasury, Victorian Treasury and Goldman Sachs.