’ Creative’ financing wears thin
THERE seems to be a lot of creative accounting going on in government.
Certainly, announcements this week by Queensland Treasurer Curtis Pitt that the state will shift $ 4 billion in debt from the Government’s books to state- owned electricity utilities is the kind of creative refinancing that should raise concern.
The reasoning is that shifting debt on to utilities will “save” government $ 600 million in interest during the next four years.
While this might be true for the Government, it will likely cost us $ 600 million as utilities absorb this new debt and go about rewriting fees and charges to pay it off.
Claims from the Treasurer that electricity prices would not be affected are laughable. As Opposition energy spokesman Andrew Powell pointed out, government debt is government debt and taxpayers will need to pay.
The problem is State Governments, particularly Queensland, are spending more than they receive in revenue and they either have to cut spending or increase taxes.
While it is easy to say, this is the problem that needs to be confronted.
In the federal sphere, more information is emerging on the Coalition’s $ 5 billion Northern Australia infrastructure concessional loan facility.
The loans will be aimed at major economic infrastructure that are “financially viable” and increase the productive capacity of Northern Australia.
Among other principles, the facility is not to be the sole funder of proposed projects.
While the Government says up to $ 5 billion will be available, budget papers show an annual expense of only $ 388 million for three years from 2016- 17 has been made.
More creative accounting? Or just bald- faced lying?
The pity is that regional centres like Townsville, Cairns, Mackay and Mount Isa are crying out for investment.
It is interesting to hear live cattle exports from the port have grown from virtually zero to more than 300,000 head last year, much of this driven by the new $ 200 million port access road.
We need more of this kind of productive investment.