Pay­ing for Bud­get ruse

Townsville Bulletin - - OPINION - BARRY LOWE, Kir­wan.

WITH the Queens­land La­bor govern­ment’s first Bud­get due on July 14, the com­mu­nity un­der­stands the Bud­get must ad­dress the com­plex is­sues of debt, deficit, in­fra­struc­ture de­vel­op­ment, the cost of liv­ing, busi­ness con­fi­dence and em­ploy­ment.

This Bud­get will be crit­i­cal to Queens­land’s fu­ture.

Queens­land has a debt of $ 80 bil­lion, cost­ing over $ 4 bil­lion in yearly in­ter­est.

Real ac­tion must be taken to have a sur­plus bud­get and re­duce our debt and in­ter­est costs.

Real ac­tion must be taken to re­store our AAA credit rat­ing.

This can­not be achieved in one bud­get, but it will never be achieved un­less a start is made.

Queens­land has a debt and deficit prob­lem that will threaten our fu­ture if not ad­dressed.

This state’s debt to rev­enue ra­tio is 140 per cent. The next high­est is NSW at 84 per cent.

Queens­land’s debt per capita is $ 15,510; NSW is $ 8700. The NSW bud­get for 2015/ 16 is in sur­plus and it has a AAA credit rat­ing.

The three lo­cal state MPs de­clared in their TB let­ter of June 13 that La­bor will re­pay debt, not sell as­sets and there will be no cuts to jobs or ser­vices. My be­lief is their let­ter demon­strated La­bor’s stated com­mit­ment to “our eco­nomic fu­ture” is a game of words, a ruse that has no pur­pose but to achieve a po­lit­i­cal out­come.

If the 2014/ 15 Bud­get is a ruse, all Queens­lan­ders will pay the penalty for po­lit­i­cal ex­pe­di­ence over the next three years.

Our three MPs say La­bor will pay down debt. They say: “This will en­able us to pay down gen­eral govern­ment debt”.

Gen­eral govern­ment debt ex­cludes debts of the gov­ern­men­towned cor­po­ra­tions ( GOCs).

The Palaszczuk govern­ment will claim it has cut the $ 46 bil­lion of gen­eral govern­ment debt by shift­ing debt to the GOCs. Our to­tal debts will, in fact, in­crease.

Another claim is La­bor will use two- thirds of the re­turns from the GOCs to re­pay the gen­eral govern­ment debt by plac­ing those funds in a debt re­pay­ment trust.

La­bor claims the GOCs pro­vide re­turns of $ 2 bil­lion an­nu­ally. If true, this al­lows yearly debt re­duc­tion of $ 1.3 bil­lion.

The pro­posed an­nual debt re­pay­ments for the first four years is $ 100 mil­lion. That is 5 per cent, not two- thirds ( 66 per cent).

The de­cep­tion is that La­bor will place the funds in its “debt trust” and then use those funds else­where, while claim­ing it has re­duced debt. It is a ruse.

The only funds that should come from the GOCs is the sur­plus prof­its.

La­bor will strip the GOCs of ev­ery dol­lar it can, force the GOCs to in­crease their debts and that will in­crease the fu­ture costs of all ser­vices in­clud­ing power. This is not a new La­bor ruse; Beat­tie and Bligh did this for years.

The proof will be in this year’s Bud­get. These eco­nomic ruses may be deemed clever pol­i­tics by some but, in truth, they be­tray all Queens­lan­ders.

CRED­I­BIL­ITY IS­SUES: Queens­land Trea­surer Cur­tis Pitt will de­liver his first Bud­get on July 14; one reader doubts La­bor’s eco­nomic poli­cies.

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