Budget to shift $ 4b in debt

MORE than $ 4 billion in debt will be shifted on to the balance sheets of Queensland’s state- owned energy companies in a bid to reduce the Government’s annual interest bill.

The Palaszczuk Government has been forced to rewrite plans to use the profits of energy companies to repay debt amid expectations future dividends will dry up.

Instead, $ 4.1 billion of debt incurred by the state will be transferred to power distributors Powerlink, Energex and Ergon Energy and generators Stanwell and CS Energy.

The plan, to be unveiled by Treasurer Curtis Pitt in next week’s State Budget, will cut $ 600 million from the state’s interest bill over four years.

Queensland Treasury recommended the debt- reduction strategy as part of a review of state finances ordered by the Government after Labor’s election victory.

Mr Pitt yesterday

insisted the energy companies had debt to revenue ratios of about 55 per cent, well below their private sector contemporaries.

“The industry standard is around 80 per cent,’’ he said.

“It could be argued that they were left at that lower gearing ratio because ( the Newman government) was trying to present them with lower debt levels for sale.”

Total government debt, including money owed by its businesses, is forecast to hit $ 80 billion this year.