Government firms in QLD shake-down
The Queensland Government is raiding its own businesses to gather $1 billion in extra revenue, but reports say the gains will be swallowed up by a bulging public sector wage bill.
Queensland Treasurer Curtis Pitt released the state’s Mid-Year Fiscal and Economic Review this week, which included plans to wrin extra dividends and special payments of $1 billion from power, port and water assets.
In addition, the state plans to save a further $680 million from the merger of power networks Energex and Ergon.
Mr Pitt insists that the “regearing” of port and water business debt levels matched independent advice.
“For those who think this regearing exercise is some kind of switcheroo, the latest $1 billion in debt reduction in the general government sector will see a further reduction of $110 million in interest repayments over the forward estimates,” he said.
But the Government’s employee expenses - including $58 million in back-pay bonuses recently awarded to public servants - will rise by about 7 per cent, or $1.3 billion in 2015-16.
If inflation maintains it current rate of about 1.5 per cent, government spending will increase by 3.6 per cent to top $50 billion for the first time.
That increase is higher than the annual revenue growth rate of 3.5 per cent, so with expenses rising and revenue coming up short, government sector debt is set to stay around $38 billion, before rising to almost $41 billion in 2018-19.
Meanwhile, overall debt (including government businesses) will top $80 billion.
The mid-year outlook confirmed that pressure from rising expenses could see the Government forced to cut other transport projects if it wants the money for the second stage of Gold Coast Light Rail.
An extra $6 million cost for adding three new ministers to the Cabinet will be offset by cutting advertising and contractor costs.
The Government is reportedly considering selling future earnings from state-owned businesses to the public service superannuation fund in exchange for further investment.
“Under this arrangement, the Government would receive funds to be applied to further reduce debt and also invest in priority infrastructure projects,” the MYFER document states.
The Electrical Trades Union backed the plan to merge power companies, but the state’s Chamber of Commerce and Industry says the rising expenditure and sluggish revenue was a poor result.
“The Government is talking about fiscal responsibility but has instead resorted to old habits, pulling out the state’s credit card to pay for new spending measures at a time when revenues are declining,” CCIQ’s Nick Behrens said.