Money for nothing
In the midst of proclaiming a budget crisis and sacking thousands of public servants, Campbell Newman’s LNP government announced that they were going to demolish the tired Executive Building, in which Newman and other senior ministers work, and get the private sector to build them a new one. This, we were told would cost the Queensland public nothing. As I pointed out at the time
it’s blatantly obvious that if you tear down a building and put up a new one with exactly the same purpose, you are taking on additional debt, whatever the accounts can be made to say.
That was obvious from first principles, but now the Auditor General has pointed out that the deal is even worse than that, saying
“Without a competitive sale process and given the significant difference between the book value and the sale price achieved, prima facie it raises the issue of whether the state can demonstrate that it obtained best value for money for the assets it sold.”
. This isn’t surprising. Whenever one of these “money for nothing” deals is pushed through, you can be sure that the public is being ripped off for more than if the payment had been out in the open.
The Opposition has estimated the net loss to the public at more than $2 billion, and that looks to me to be in the right ballpark.
As a comparison, if you take $100000 as a round estimate for the savings in salary, on-costs and so on from dismissing a public employee this luxury project blows, over its lifetime, the annual savings from cutting at least 20 000 jobs, the number originally proposed by Newman. This was later cut to 14 000, quite a few of them replaced by outside contractors. So, it’s probable that, over the first time of the LNP government, the loss on this one piece of public extravagance will wipe out more than half the savings made by the sackings. Let’s hope the first term will also be the last.
And, with the Abbott government doing its best to help at the Federal level, reports like this might finally help to demolish the silly idea that the LNP has some sort of advantage in economic management.