A bit early for monument building …
… 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 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.