De Lacy slams fis­cal cow­ardice

The Australian - - FRONT PAGE - MICHAEL McKENNA SARAH ELKS

For­mer Queens­land trea­surer Keith De Lacy has con­demned La­bor and the Lib­eral Na­tional Party for re­fus­ing to out­line any plans in the elec­tion cam­paign to tackle the state’s na­tion-lead­ing debt.

The re­tired busi­ness­man, the trea­surer in the Goss La­bor govern­ment, yes­ter­day ac­cused both ma­jor par­ties of po­lit­i­cal cow­ardice in build­ing their pitch to vot­ers on costly prom­ises at the ex­pense of fis­cal re­pair.

For­mer Queens­land trea­surer Keith De Lacy has con­demned La­bor and the Lib­eral Na­tional Party for re­fus­ing to out­line any plans in the elec­tion cam­paign to tackle the state’s na­tion-lead­ing debt.

The re­tired busi­ness­man, a trea­surer in the Goss La­bor govern­ment, yes­ter­day ac­cused both ma­jor par­ties of po­lit­i­cal cow­ardice in build­ing their pitch to vot­ers on costly prom­ises at the ex­pense of fis­cal re­pair.

Queens­land’s to­tal debt — which in­curs a cur­rent an­nual in­ter­est bill of $1.7 bil­lion — is due to hit $81bn by 2020-21, but nei­ther ma­jor party has a plan to cut the state’s bor­row­ings sig­nif­i­cantly.

Mr De Lacy echoed the com­ments of re­spected econ­o­mists who warned this week debt lev­els were dan­ger­ously high and ques­tioned how the is­sue could be ig­nored in a cam­paign that has been largely de­void of eco­nomic de­bate.

“The main is­sue in this cam­paign ought to be fis­cal con­sol­i­da­tion and bur­geon­ing debt, yet it has to­tally gone miss­ing,’’ he said. “It is just so dis­ap­point­ing the way in which Queens­land’s fis­cal po­si­tion has de­te­ri­o­rated in the past 20 years.’’

Mr De Lacy said the Goss govern­ment had op­er­ated on the prin­ci­ples of main­tain­ing Queens­land as “the low-tax state’’, fully fund­ing fu­ture li­a­bil­i­ties and bor­row­ing only for in­fra­struc­ture that could ser­vice its own debt.

Queens­land lost its AAA credit rat­ing dur­ing the 2009 state elec­tion, won by the Bligh La­bor govern­ment, which an­nounced as­set sales to pay off some of the debt just weeks af­ter be­ing re­turned to power.

Mr De Lacy, who over­saw a govern­ment with zero net debt, said it was wrong for po­lit­i­cal lead­ers to leave the debt for fu­ture gen­er­a­tions. “Now, we find our­selves with a fis­cal sit­u­a­tion that is cas­cad­ing out of con­trol and it doesn’t rate a men­tion in the cam­paign,” he said. “Nei­ther party seems pre­pared to tackle the fun­da­men­tal is­sue of debt.

“It is all about spend, spend, spend and pass­ing the buck onto our chil­dren and grand­chil­dren.’’

LNP leader Tim Ni­cholls — who pushed a $42bn pri­vati­sa­tion pol­icy as New­man govern­ment trea­surer to re­duce debt and build in­fra­struc­ture — has ruled out as­set sales and forced pub­lic sec­tor re­dun­dan­cies to im­prove the state’s bot­tom line.

Mr Ni­cholls has promised only to “sta­bilise” the debt in the next term of govern­ment, and has ruled out or­der­ing a fresh com­mis­sion of au­dit to ad­dress the state’s ail­ing fi­nances, af­ter he called in for­mer fed­eral trea­surer Peter Costello in 2012 to in­ves­ti­gate Queens­land’s “un­sus­tain­able” debt lev­els.

Yes­ter­day, One Na­tion Queens­land leader Steve Dick­son at­tacked Mr Ni­cholls, al­leg­ing that for­mer pre­mier Camp­bell New­man warned against as­set sales but Mr Ni­cholls forged ahead.

“I sat di­rectly op­po­site Camp- terms (West­ern Aus­tralia is catch­ing up), the net debt fig­ure is less of a worry. But there is an ac­count­ing trick that af­fects Queens­land be­cause the as­sets of the fully funded (just) govern­ment su­per­an­nu­a­tion scheme are counted but the li­a­bil­i­ties are not. The other states don’t have fully funded su­per­an­nu­a­tion.

And what hap­pened to that debt-re­duc­tion strat­egy that the Palaszczuk-Pitt team promised at the last elec­tion cam­paign — you know, the one that in­volved the merger of the two en­ergy com­pa­nies (now ditched) and the sep­a­rate debt-re­duc­tion fund that would make a sig­nif­i­cant in­road into the out­stand­ing debt level?

By con­trast, the La­bor duo, sup­ported by the rest of cab­i­net, has found it much eas­ier to un­wind the slight re­duc­tion in pub­lic-sec­tor em­ploy­ment achieved by the short-lived New­man Lib­eral Na­tional Party govern­ment and added more work­ers. In per capita terms, Queens­land has the high­est num­ber of pub­lic-sec­tor work­ers by a coun­try mile. But, hey, these work­ers could come in handy for a few ex­tra votes.

But if the P-P team hasn’t had much to say about govern­ment debt dur­ing the cam­paign, the same can be said of the Tim Ni­cholls’s LNP op­po­si­tion. No talk about as­set sales or leases these days. There is just some vague com­mit­ment to keep the govern­ment debt at about its cur­rent level while mak­ing a series of new spend­ing prom­ises.

It’s a case of Twee­dle­dum and Twee­dledee when it comes to govern­ment debt in Queens­land. Let’s just hope there is no re­run of the global fi­nan­cial cri­sis, even on a smaller scale, be­cause at that point the Pre­mier may well re­gret the lax at­ti­tude of suc­ces­sive gov­ern­ments, the New­man govern­ment aside, to run­ning up un­sus­tain­able lev­els of debt.

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