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 QLD elections: debt soars but voters care not?

27.10.20.  Four days to go for Queenslanders. Perhaps too many in the sunshine state must be glued to the Facebook propaganda spread like the virus, rather than the difficult stuff like debt and budget which controls everyone and everything. The PalaceDuck will tell Queenslanders about her budget after she wins the election. Does that mean she views her people as total idiots? Would anyone be fool enough to sign a blank cheque? Nah?
There was a time when a government’s poor financial management carried a heavy political price. Reckless financial management was a death knell. But, judged by the experience of Queensland, voters today seem immune to stories of wasteful government spending, rapid growth of public sector employment, escalating government debt and the downgrading of the state’s credit rating.

Source: Judith Sloan, The Australian

Queensland’s debt is spiralling out of control, but voters unperturbed

Think what you will of the ­Bjelke-Petersen era, his government ran a tight fiscal ship. Under the powerful economic leadership of Sir Leo Hielscher as under treasurer, he insisted that superannuation entitlements of public sector workers were fully funded, a practice not followed by the other states. Spending was tightly controlled and considerable thought was given to the economic impact of revenue-raising options.
The fiscal rot for Queensland set in under Peter Beattie, Labor premier between 1998 and 2007. General government borrowing went from $2.7bn in 2003-04 to $45.5bn 10 years later. Net debt went from minus-$16bn to plus $8.8bn in a decade.
Fiscal matters didn’t improve under the next premier, Anna Bligh, and in 2009, the state lost its AAA credit rating.
When the Palaszczuk government unexpectedly came to power in 2015, having defeated the short-lived Campbell Newman LNP premiership, there were plans to control debt and to begin to pay it down. Total government debt was nudging $80bn (including government-owned corporations) but the restructuring of government electricity assets plus some transfers from the government superannuation fund was going to do the trick. There was also a firm commitment not to sell any government assets.
It was essentially a hoax on the part of the Palaszczuk government. Government debt in Queensland has grown rapidly. And under cover of the COVID-19 crisis, total government debt hovers about $100bn, the largest of all the states.
Until last year, Queensland maintained the veneer of proper fiscal practices such as handing down an annual budget, providing four-year forward estimates and presenting a mid-year fiscal and economic update. But there was plenty of made-up figures contained therein, particularly the growth of its own employee expenses.
It is a habit of the Palaszczuk government to underestimate the size of the public sector and its cost. In last year’s budget, employee expenses were expected to rise 13 per cent between 2018-19 and 2022-23, reaching $27.2bn. Doubtless this will be a gross underestimate.
While other states sought pay freezes, the Queensland government negotiated a pay rise of more than 3 per cent for state public servants, which included a one-off cash payment of $1250. At the same time border restrictions were being imposed that were sending some Queensland businesses to the wall.
The original plan was to hand down a budget last April – before the federal budget. This was shelved and on July 23 newly installed Treasurer Cameron Dick produced the flimsiest of fiscal position updates. This was followed by September’s COVID-19 Fiscal and Economic Review but with little additional information.
The public were simply told the 2019-20 budget surplus had vanished and a deficit of almost $6bn would be recorded.
In 2020-21, a further deficit of $8.5bn is expected, with general government debt rising by $15.6bn or 36 per cent in one financial year. The budget is out of control and only some of it can be explained by the pandemic.
The government has provided no four-year forward estimates or given any indication of when the recurrent budget will return to surplus.
This criticism has been levelled by Queensland-based independent economist Gene Tunny, who previously worked for the Queensland Treasury.
Going by Labor’s campaign attack on the LNP’s perfectly reasonable plan to return the recurrent account to surplus within four years, however, it’s fair to assume Labor has no plans to achieve any surpluses for many years.
Labor’s comparison of the state situation to the federal government projecting budget deficits for a decade simply underscores its lack of understanding of public finances. There is no distinction made in the federal budget between recurrent and capital budgets as is the case at the state level.
Of course, no one has ever thought that the Queensland Premier has a clue about fiscal matters. But to claim the plan to employ thousands more nurses was fully funded because the money would be borrowed is both breathtaking and fiscally irresponsible.
When it comes to the government’s COVID-19 plan, Unite and Recover: Queensland’s Economic Recovery, it’s more flim-flam than substance. There are lots of bibs-and-bobs spending programs supporting workers, households and businesses. They have very high administrative costs relative to total spend.
Infrastructure spending is also part of the deal, with the government boasting about “the largest four-year infrastructure guarantee in nearly a decade of $51.8bn”.
Mind you, it’s very evident that some of the large infrastructure projects haven’t been going according to plan. Brisbane’s much-vaunted Cross River Rail project is rent with issues, in terms of technical matters, timing and dollars. There are serious problems surrounding the Boggo Road station and the culture within the authority is toxic.
Fixing up the Bruce Highway has similarly been associated with delays and cost blowouts.
Like a number of state governments in the past – Victoria’s Kennett government in its final years but many others – the Palaszczuk government has become increasingly attracted to bread and circuses. However, the costs of attracting bread and circuses – the AFL Grand Final, movies and the like – are never revealed: commercial-in-confidence, you must understand, using taxpayers’ money.
The trouble for the LNP opposition campaigning to win government is that the public appears to have no interest in fiscal rectitude and disciplined spending. And for that large slab of protected public sector workers, closing the borders has not been a big deal.
The Queensland government went into the COVID-19 crisis badly placed. Government debt was very high and projected budget surpluses were predicated on substantial ongoing coal royalty revenue. The cost of the rapidly growing number of public servants was already getting out of hand.
A day of reckoning will come – and bear in mind the federal government may have to pick up the tab. But in the meantime, there are few indications any Queensland government will see fiscal reason and the beauty is the fault can now be laid at the feet of COVID-19.

{ 10 comments… add one }
  • Pensioner Pete 27/10/2020, 6:47 am

    The Queensland Treasurer Cameron Dick’s statements as quoted in The Courier Mail yesterday with the headline: “Labor costings reveal $3.7bn in election promises to be funded entirely in borrowings”

    Quote:
    “The commitment to additional health staff of 5800 nurses, 1500 doctors and 1700 allied health professionals by September 2024 is to be funded from the existing Queensland Health Funding envelope subject to achieving the existing efficiency and productivity dividends set out in the agreement …” the costings document reads.

    And, quote:
    “An election commitment to employ an extra 2025 police officers by 2025 would be entirely funded by borrowings until 2023-24, with the last year of the promise not costed in the document.

    And the commitment to fund 6190 new teachers and 1139 teacher aides over the next four years is funded from the existing Education Department budget.”

    Refers (pay-walled): https://www.couriermail.com.au/news/queensland/state-election-2020/labor-costings-reveal-37bn-in-election-promises-to-be-funded-entirely-in-borrowings/news-story/1207d30cf0a6135ca19db26c8318f6cf

    All of whom, are/will be public servants.

    How in hell are we Queenslanders going to be able to pay for all this debt, a debt now at $110 Billion?

    I smell a fire sale of assets as being imminent, despite all the ‘political promises’, there will be no other option offered whether Labor/Green Alliance or the LNP secure government, but to flog off the family silver.

    • Muphin 27/10/2020, 8:08 am

      Dick name DICK head by nature.

    • GTD 27/10/2020, 8:25 am

      I keep hearing that Palletofchookshit will make a decision on opening the border on Friday .. The day before the election. The same day Graeme Skroo Turner of Flight centre is supposed to be given the ‘medical evidence of the border closure ‘ .
      It’s been nothing but Political.
      Note we don’t hear from the overpaid unelected so called expert J Young anymore..

  • seadogger 27/10/2020, 7:33 am

    A great start in sales would be the Gladstone Ports Corporation but not to the Chicoms. Worth a motza and currently a sinecure for Liebor hacks.

  • Uber 27/10/2020, 7:53 am

    ‘Fixing up the Bruce Highway has similarly been associated with delays and cost blowouts.’
    Oh, it’s not just Labor. Ever heard of a project in Sydney called North Connex (the name representing the facile state of mind into which we have descended)? It’s already a year overdue with no opening date in sight. Our media couldn’t care less – not a word has been reported on this scandal. Not a word from the RTA or the state government planners.
    Public money is water. Voters don’t care anymore, they know the situation is hopeless.

  • Disgruntled 27/10/2020, 8:41 am

    Governments and their bureaucrats running the various shows really do have a lot to answer for in the haphazard way they ensure things are done properly and also with serious economic accountability!

    When you look at it with any seriousness at all it seems as if a lot of the time the principle of DILLIGAF is used quite often.

    Seems as if Joe Biden and his “crime family” aren’t the only ones sometimes benefiting!

    Uber’s comment of >Public money is water. Voters don’t care anymore, they know the situation is hopeless.< says it all!!!

  • Aktosplatz 27/10/2020, 8:56 am

    ” the public appears to have no interest in fiscal rectitude and disciplined spending.”

    That above statement (from the article) has been true for many years, across the whole country.
    The last PM to speak out against ballooning debt was Tony Abbott, and look where that got him!
    The same may be said for Campbell Newman as State Premier for Qld.

    The dim witted public act as if the ‘debt’ is someone else’s and is therefore not their individual problem.

    We have turned into a very selfish society.

  • DT 27/10/2020, 11:42 am

    The Can Do Premier was too hard on Queensland, remember?

    So was Premier Jeff in Victoria.

    • Pensioner Pete 27/10/2020, 12:57 pm

      Ask the people at Brisbane City Council how CouldNotDo performed there when Lord Mayor and maybe you will get the picture why CouldNotDo was booted from Government so quickly.

      Or perhaps, ask his fellow diggers about how CouldNotDo was regarded within the military ranks at the time.

  • Ex ADF 27/10/2020, 12:25 pm

    I reckon the Bruce Highway should be sold to the Chinks, and turned into a toll road.

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