’ Cre­ative’ fi­nanc­ing wears thin

Townsville Bulletin - - OPINION -

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.

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