Home > Economics - General, Oz Politics > A bit early for monument building …

A bit early for monument building …

September 5th, 2012

… unless you expect to be in for one term at most. Having announced that Queensland is on the verge of defaulting on its public debt, as in Greece and Spain, and sacked thousands of public servants, Campbell Newman is now proposing to build a brand-new office tower in the Brisbane CBD, to be financed by the sale of up to 20 other buildings including heritage assets. Apart from the economics, this is a direct breach of the LNP promise, crucial to its election victory, not to undertake asset sales before the next election. The project is being sold as “self-financing”, but this claim appears to rely almost entirely on rosy scenarios and magical ponies.

Proposals like this make sense of one of the more puzzling features of the Costello Commission of Audit, namely its insistence that the capital expenditure projections of the previous government were unsustainably low. The projections appeared reasonable on the assumption that, in straitened times, there wouldn’t be any major new initiatives, as opposed to maintaining and modestly extending existing infrastructure. But, obviously Costello understood that Campbell Newman (like Anna Bligh) was not the kind of Premier who could forgo lots of TV appearances in a hard hat. In this context, it’s worth re-examining his record as Lord Mayor which involved buying short-term popularity at the expense of long term debt – exactly the opposite of what he now says Queensland needs

Newman’s massive program of roads and tunnels, grandiosely named TransApex has done little to ease traffic congestion (the Go-Between bridge has actually made it worse, by putting an extra intersection in the middle of what was already a traffic snarl), but it has saddled the Council with a massive debt. The latest budget shows debt of $2.1 billion against revenue of less than $2 billion, a debt-revenue ratio of 106 per cent, rising to 114 per cent next year. That’s the ratio that Costello says is dangerous and unacceptable for a state government, with much more power to raise additional revenue than a city council.

Clearly enough the sacking of public employees[1] and the sale of public assets is a breach of election promises, not as bad as the mass sackings in its effects, but more direct in its fraudulence, since this is exactly why people voted against Bligh and Fraser. Economically, the scheme has all the hallmarks of a disaster, with shonky accounting producing the “something for nothing” typical of PPP and BOOT schemes.

The only good side of this is the uniformly hostile public reaction. Despite his massive majority, Newman is looking more and more like a one-termer.

fn1. Having announced that nurses are now in line to be sacked, Newman is saying that he never meant to protect frontline employees, only “frontline services”. And since these have been handed off to local hospital boards, they are the ones to take the blame when services are cut. However, the LNP cronies Lawrence Springborg is appointing to these jobs will doubtless be adequately compensated for their pains.

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  1. Freelander
    September 6th, 2012 at 00:07 | #1

    Qld default! I’m shocked to hear that Queensland is about to leave the Aussie-zone.
    Suppose this means our prospect of becoming the world’s reserve currency is noe shot. Not that we need exorbitant privledge as long as the mineral boom holds.

  2. David
    September 6th, 2012 at 07:22 | #2

    A little bit of pose from Shelly does help sometimes (http://www.online-literature.com/shelley_percy/672/)

    ‘My name is Ozymandias, king of kings:
    Look on my works, ye Mighty, and despair!’

    The lasting effect of the economic transformation will too fade in time although we have a massive pile of unemployment, economic damage and environmental destruction (the latest is the removal of the rubbish levy http://www.brisbanetimes.com.au/queensland/7000-truckloads-of-rubbish-heading-our-way-20120905-25du6.html) to deal with in the short to medium term.

    Nothing quite like putting a permanent negative shock into the states GNP that unfortunately like a well thought out policy won’t be a one off.

  3. Ikonoclast
    September 6th, 2012 at 08:18 | #3

    I feel like Australian politics has been caught in stasis for over twenty years. We have had reputable independent economists, like Prof J.Q., warning us about the fraudulance of PPP and BOOT schemes for all of this time and about the fallacies of privatisation as pushed by the neocons. These economists have published many books, papers and articles exposing the real financial figures behind these PPP, BOOT and privatisation schemes. They have catalogued empirically and irrefutably the failures of these schemes and their negative effects on public services, infrastructure and the economy in general.

    Yet somehow, our political and economic system seems incapable of throwing off this failed paradigm. Politicians of both persuasions, like Bligh and Newman, still pursue the same tired, old failed path. The public vainly flip-flop their support from one blinkered, irrational, ideologue privatiser to another. Why is their no real choice in our political system? Why can’t we escape this dysfunctional paradigm?

  4. Ikonoclast
    September 6th, 2012 at 08:19 | #4

    Correction: “Why is there no real choice… “

  5. rog
    September 6th, 2012 at 10:15 | #5

    The earlier ann by the relevant minister to cut back/close down edu facilities like Longreach Ag had the locals in shock. The only reason given was that these institutions had to pay their way (ie be run like a business) which appeared to confound any or all logic and received short shrift in the media. The LNP have since tweaked the policy but it seemed that the damage has been done.

    A few people I met in central Qld volunteered “I didn’t vote for him…”

  6. Freelander
    September 6th, 2012 at 13:57 | #6

    @Ikonoclast

    Even the Productivity Commission has put out a couple of publications with the strong implicit message that PPP and Boot schemes are cr-ap.
    Don’t worry. The principal authors were duly punished for the blasphemy. (Or so I heard.)

  7. Troy Prideaux
    September 6th, 2012 at 14:10 | #7

    Freelander :
    @Ikonoclast
    Even the Productivity Commission has put out a couple of publications with the strong implicit message that PPP and Boot schemes are cr-ap.
    Don’t worry. The principal authors were duly punished for the blasphemy. (Or so I heard.)

    lol, wonder what the punishment was, 6 months rehab in the IPA?

  8. alex dante
    September 6th, 2012 at 15:30 | #8

    This seems like a long-term scam to drive the political offices out of the inner city, frankly.

  9. stockingrate
    September 6th, 2012 at 21:40 | #9

    @Freelander
    The wall of money available to loot the country through PPP etc buys armies of well paid bankers, financiers, consultants, etc.

  10. September 6th, 2012 at 21:49 | #10

    @rog: What did the dickheads expect? CN is of the Liberal Party, and they make out they are shocked when he goes & acts like a Liberal? (shake head slowly).

  11. Freelander
    September 6th, 2012 at 22:05 | #11

    Qld is a veritable cornucopia of political saviours wondering out of the wilderness ((and ending back in) —
    Joh, Kevin, now Campbell Newman?

  12. Ikonoclast
    September 7th, 2012 at 11:26 | #12

    I agree with SATP in one sense. CN is acting like a typical Liberal. Why the surprise from anyone? Of course, I guess that SATP approves of CN’s actions, whereas I disapprove. However, there is no surprise in CN’s actions. It’s what we all should expect.

  13. Troy Prideaux
    September 7th, 2012 at 11:40 | #13

    @Ikonoclast
    Yes, as an outsider (from a different state) who didn’t hear any of his election promises, his/their actions should have been totally expected. Given the colossal loss of popularity so quickly, I’m assuming he’s broken a few election commitments?

  14. Tom
    September 7th, 2012 at 12:04 | #14

    @Troy Prideaux

    Election promises which are directly opposite to the political party’s ideology? SATP and Ikonoclast is right here, this is what the LNP stands for, and that CN did nothing wrong. The QLD voters only have themselves to blame if they don’t even know the agenda of the political party they are voting for.

  15. Troy Prideaux
    September 7th, 2012 at 12:09 | #15

    @Tom
    You make a good point Tom.

  16. Jim
    September 7th, 2012 at 16:45 | #16

    Don’t be so harsh on PPPs and BOOTs. There are many lucrative careers built on the back of this dubious practice. Before criticising them, ask yourself….

    How else will the politicians get a piece of infrastructure built that might have their name on it, or get their ‘hard hat moment’?

    How else can infrastructure developers maximise their opportunities for rent seeking from their work, while the risks are socialised?

    Are you really suggesting the decision to build new infrastructure should be based on sound benefit costs analysis, rather than whether we can create some tricky way to finance it?

  17. September 10th, 2012 at 16:12 | #17

    Obviously the solution is to strengthen occupational health and safety laws so that there will be more opportunities for politicians to have hard hat moments. Perhaps if hard hats were required for the opening of tim-tam packets? After all, I once had a microlith of of fat and sugar launched at my head when I got a little too enthusiastic about opening the packet.

  18. September 10th, 2012 at 16:12 | #18

    Obviously the solution is to strengthen occupational health and safety laws so that there will be more opportunities for politicians to have hard hat moments. Perhaps if hard hats were required for the opening of tim-tam packets? After all, I once had a microlith of of fat and sugar launched at my head when I got a little too enthusiastic about opening the packet.

  19. Jim Rose
    September 10th, 2012 at 16:53 | #19

    Queensland is on the verge of defaulting on its public debt! don’t these type of risks show up in credit ratings and other independent measures of declining credit worthiness?

  20. Jim Rose
    September 10th, 2012 at 16:53 | #20

    Queensland is on the verge of defaulting on its public debt! don’t these type of risks show up in credit ratings and other independent measures of declining credit worthiness?

  21. Freelander
    September 10th, 2012 at 17:35 | #21

    One would hope so!

    But the GFC suggests otherwise.

    However, given the politics and the leanings of the raters, if Labor Qld had been the least sus defaultwise, ratings would have reflected it.

    These audit stunt work because the public is composed of 90% idiots. The other 10% lets be generous and give them the benefit of the doubt.

  22. Freelander
    September 10th, 2012 at 17:35 | #22

    One would hope so!

    But the GFC suggests otherwise.

    However, given the politics and the leanings of the raters, if Labor Qld had been the least sus defaultwise, ratings would have reflected it.

    These audit stunt work because the public is composed of 90% idiots. The other 10% lets be generous and give them the benefit of the doubt.

  23. Jaime Simmonds
    September 10th, 2012 at 20:11 | #23

    Mr Newman if you were my son, I would have grounded you for bullying, deceitfulness and breaking people’s lives. You would be banned from playing politics for the rest of the year. Your state government has misrepresented the public service Ethics Act and code of conduct to promote the public good. I hope no one in my family needs medical treatment as the people responsible for accountability are gone, too busy to double check the surgeons qualifications or are developing an extra extended waiting list. I hope no one in my family needs a job as the training options for those who are not financially secure have been taken away and the Centrelink queues are getting longer. I hope I can continue to pay my rent as the housing advocacy groups have been decimated and I don’t want to be put on the housing list with the other 30,000 state wide households and join the every increasing homeless statistics.

    When tightening the family budget or crises the first response is how to increase the weekly income and access the public/community sector for help. The next is too find more employment or have a garage sale to increase income and then cut back or adjust expenses associated with luxuries, such as alcohol, cigarettes, and recreation/sport. Every family knows you don’t mess around with the critical expenses for the family’s housing, medical, education and daily living needs, and/or anything that would suggest neglect and Child Safety knocking on your door.

    For the State LNP dominated government to have only used one tool in the shed has decimated the public sector and state funded community services. To have deliberately provided comments that are half truths and contextually misleading one could only fathom what this budget on September 11 will bring to develop or destroy your four pillar economy. The irony is overwhelming, well done.

    The numerous publications and the Commission of Audit Interim Report have clearly identified an ideologically driven campaign to indoctrinate the state’s influential constituents that would in turn parrot your slogans to believe we need to get Queensland back on track by letting a majority stacked LNP Campbell Newman Government make all the hard decision without contention, blame the previous labour government for everything. Subsequently, complying with biased evidenced driven slogans that those still employed need to work harder and not rely on public and community services for anything and the thousands of marginalised people in the state can continue to go without. To use a flawed and biased evidenced based driven political campaign to influence the state and fraudulently amend State policy is reminiscent of the entrenched international eugenics movement during 1930s and 1940s to dictate and justify cruel atrocities, which are now being committed in Queensland and will be truly felt come September 11 2012.

    Mr Newman people are complaining, you’re just not listening or placing yourself where people are hurting. Offcourse people suffering where not at the EKKA, or anywhere else you have been hiding. This so called party has been a wake, as people are still trying to gain employment after they and their employers lost everything last year and they are not able to afford training to be up skilled or let alone pay the every increasing daily living expenses. They are still waiting for those small businesses to resurface and provide work for the every increasing queue at Centrelink. The ongoing significant financial hardship at the home front results in a heavy reliance on the state’s public services and grants funded programs that continue to be reduced/closed through the states budget cuts. This current State Newman Government’s ideologies to be performance based and have a crises driven social response instead of a risk-lead preventive approach to reduce the long term strain on health, employment and housing is fruitless. The contradictory statements by Newman and Nicholls that they will increase the public sector just after they have mutilated speaks for itself. The critical assessments of the LNP publications highlight the true ideological nature of the LNP political game to deceive the public to achieve self serving gains. The acknowledgment that the Bligh government expended money into asset based infrastructure and commission inquiries to address deficits in public service delivery has no bearing in the economic crises rather an investment in long term gain. However, if history speaks for itself the previous Mayor expended exorbitant amount of monies on under-used tunnels, bridges and bikes. Mr Newman’s action plan to grow a four pillar economy with a strong focus on the mining and racing industries is a real gamble. The real question is who stands to gain and who will the LNP go after next after it’s done with the public sector.

  24. Jaime Simmonds
    September 10th, 2012 at 20:11 | #24

    Mr Newman if you were my son, I would have grounded you for bullying, deceitfulness and breaking people’s lives. You would be banned from playing politics for the rest of the year. Your state government has misrepresented the public service Ethics Act and code of conduct to promote the public good. I hope no one in my family needs medical treatment as the people responsible for accountability are gone, too busy to double check the surgeons qualifications or are developing an extra extended waiting list. I hope no one in my family needs a job as the training options for those who are not financially secure have been taken away and the Centrelink queues are getting longer. I hope I can continue to pay my rent as the housing advocacy groups have been decimated and I don’t want to be put on the housing list with the other 30,000 state wide households and join the every increasing homeless statistics.

    When tightening the family budget or crises the first response is how to increase the weekly income and access the public/community sector for help. The next is too find more employment or have a garage sale to increase income and then cut back or adjust expenses associated with luxuries, such as alcohol, cigarettes, and recreation/sport. Every family knows you don’t mess around with the critical expenses for the family’s housing, medical, education and daily living needs, and/or anything that would suggest neglect and Child Safety knocking on your door.

    For the State LNP dominated government to have only used one tool in the shed has decimated the public sector and state funded community services. To have deliberately provided comments that are half truths and contextually misleading one could only fathom what this budget on September 11 will bring to develop or destroy your four pillar economy. The irony is overwhelming, well done.

    The numerous publications and the Commission of Audit Interim Report have clearly identified an ideologically driven campaign to indoctrinate the state’s influential constituents that would in turn parrot your slogans to believe we need to get Queensland back on track by letting a majority stacked LNP Campbell Newman Government make all the hard decision without contention, blame the previous labour government for everything. Subsequently, complying with biased evidenced driven slogans that those still employed need to work harder and not rely on public and community services for anything and the thousands of marginalised people in the state can continue to go without. To use a flawed and biased evidenced based driven political campaign to influence the state and fraudulently amend State policy is reminiscent of the entrenched international eugenics movement during 1930s and 1940s to dictate and justify cruel atrocities, which are now being committed in Queensland and will be truly felt come September 11 2012.

    Mr Newman people are complaining, you’re just not listening or placing yourself where people are hurting. Offcourse people suffering where not at the EKKA, or anywhere else you have been hiding. This so called party has been a wake, as people are still trying to gain employment after they and their employers lost everything last year and they are not able to afford training to be up skilled or let alone pay the every increasing daily living expenses. They are still waiting for those small businesses to resurface and provide work for the every increasing queue at Centrelink. The ongoing significant financial hardship at the home front results in a heavy reliance on the state’s public services and grants funded programs that continue to be reduced/closed through the states budget cuts. This current State Newman Government’s ideologies to be performance based and have a crises driven social response instead of a risk-lead preventive approach to reduce the long term strain on health, employment and housing is fruitless. The contradictory statements by Newman and Nicholls that they will increase the public sector just after they have mutilated speaks for itself. The critical assessments of the LNP publications highlight the true ideological nature of the LNP political game to deceive the public to achieve self serving gains. The acknowledgment that the Bligh government expended money into asset based infrastructure and commission inquiries to address deficits in public service delivery has no bearing in the economic crises rather an investment in long term gain. However, if history speaks for itself the previous Mayor expended exorbitant amount of monies on under-used tunnels, bridges and bikes. Mr Newman’s action plan to grow a four pillar economy with a strong focus on the mining and racing industries is a real gamble. The real question is who stands to gain and who will the LNP go after next after it’s done with the public sector.

  25. Freelander
    September 10th, 2012 at 20:35 | #25

    @Jaime Simmonds

    But his parents didn’t ground him. Because they knew that is precisely the type of behavior it takes to get on in life!

  26. Freelander
    September 10th, 2012 at 20:35 | #26

    @Jaime Simmonds

    But his parents didn’t ground him. Because they knew that is precisely the type of behavior it takes to get on in life!

  27. Freelander
    September 10th, 2012 at 20:41 | #27

    I’m waiting for everyone to be provided a cache of vouchers covering every possible contingency, and redeemable from with any service provider. Build a kit of vouchers and they (the service providers) will come.

  28. Freelander
    September 10th, 2012 at 20:41 | #28

    I’m waiting for everyone to be provided a cache of vouchers covering every possible contingency, and redeemable from with any service provider. Build a kit of vouchers and they (the service providers) will come.

  29. Not campbells parents
    September 12th, 2012 at 20:54 | #29

    The only person to gain from this disaster who calls himself Campbell Newman, is Mr Newman himself. Of course he is making sure he is getting paid, his family are being supported (What happened to severing ties to family businesses within the allocated timeframe??) and that there is someone to take the fall for all of his decisions. If something goes wrong “it was the labour government before me” whose caused the problem. Grow up Newman. Obviously your parents did not ground you and you were allowed to do whatever you wanted because that is clearly what is happening now or are you going to blame the Queensland public who believed your lies and voted you in for the mess our state is in?
    p.s. spending money on infrastructure will create more money in the future… The labour government were making the right call there.

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