Full steam ahead for the debt locomotive

HOW sensible are you when it comes to managing your money? Have you been seduced into getting a credit card, perhaps by an interest-free offer that ultimately becomes anything but?

Or are you happy in the knowledge that, having worked hard and saved, you have managed to remain largely debt free?

If the latter, think again. You have got a credit card, and you owe $15,000 on it. It’s may be little comfort, but you’re not alone. That’s the amount owed by every Queenslander via the debt accrued on our behalf by successive state governments.

It’s an unusually high figure, higher than any other state or territory bar Western Australia, which has been whacked by a major mining and property downturn. And it’s getting higher. Yesterday’s budget revealed state debt is forecast to surpass $90 billion in four years. That’s an astonishing $18,000 for every man, woman and child in Queensland.

So what do you get for your credit card shopping spree?

Not an extension to the light rail, that’s for sure. Opponents of stretching the line to Burleigh can celebrate. While the Federal government has budgeted $112 million for the project, and council will forlornly promise tens of millions in its budget tomorrow, the state government has committed absolutely zero, zilch, nada, not a button.

Labor argue that the Federal Government should be providing more. They are right, but that is not a reason to make no budget provision for the project whatsoever. Barring an unlikely breakthrough in the row with Canberra, for the foreseeable future, the light rail goes to Broadbeach and no further.

Also not loaded onto the state credit card is any serious down payment on the badly needed Coomera Connector in the city’s north. The $10 million provided for more design work proves that Labor MP for Macalister is right to suggest the project is just “a proposal” and that nothing will happen in the “short to medium term”.

Nor will you be seeing any surge in police numbers on the Gold Coast, despite the very obvious need for more resources.

It would be forgivable if all of this delayed spending was due to a sudden realisation in Brisbane of the need for a little fiscal prudence, given soaring debt.

Respected voices have been expressing concern for some time about the risk of maxing out the state credit card.

Former Treasury Corporation Chairman Sir Leo Hielscher, who arguably knows more about these matters than any other Queenslander, has been among those calling for spending restraint.

“It (the state budget) is very similar to the one at home,” he said last year. “If you haven’t got the cash, you shouldn’t spend it. You don’t borrow to pay the groceries, other lifestyle or day-to-day outgoings.”

But the government’s borrowing continues to soar.

So what are we really getting?

A key part of the reason for runaway spending is the burgeoning public service wage bill. Even the government itself admits the problem.

But that’s not all of the story.

The aversion to infrastructure spending melts away once one travels further north to the Gold Coast.

While the light rail must hit the buffers because the Federal Government is deemed to be offering insufficient financial support, it’s full steam ahead for Brisbane’s Cross River Rail even though the Palaszczuk government must supply 100% of the gargantuan cost.

The credit card runs hot, but the state Government remains determined to buy the shiniest train set in the toy shop.

Even if you never hop on the line to Brisbane, you’ll be paying for this particular project for many years to come.

On its own, the $5.4 billion cost adds more than $1000 to the liability facing every Queenslander. It’s a debt to be borne as much by those in Southport and the Southern Downs as by the good people of South Brisbane.

Without question the project has merit, but surely we should get the budget under control before splashing out on such an indulgence.

A responsible person, facing similar issues in their household budget, would take the advice of a financial adviser and draw up a plan for getting debt down and costs under control before splashing out on such luxuries.

What a pity that Treasurer Jackie Trad does not heed the wise words of people like Sir Leo and do the same for Queensland.

What does our State Treasurer Jackie Trad do when we are already up to our ears in debt? She ’maxes out’ the credit card even further by buying the most expensive train set in the shop.