IF THE interest rates the Queensland government paid pre-GFC (2008) applied to the current state debt, that’s $3.5 billion minused-out of each year’s budget.
That $3.5 billion is five new high schools, a major hospital, 350kms of quality regional highway — per year.
That should put all the promises made in this election in context.
The current $72 billion state debt will, most optimistically, top out at $80 billion in the next four-year term.
And interest rates at some time will return to the more usual levels.
And the raiding of government business enterprises (mostly electricity, but also ports) and public sector superannuation is also about at an end, so the ‘funny money’ budget shuffles of the last few years are down to the last few pennies.
When you look at the figures starkly, there’s no room for extra schools and hospitals, and the Bruce Highway will stay potholed.
That’s the reality.
So, promising $5 billion for an underground railway in Brisbane to support a declining number of commuters makes no sense.
Only with that taken out of the election promises, can there be any hope of at least stopping the rise in state debt in time for the interest rate rises forecast by every Central Banker (including our own Reserve Bank governor and deputy this week).
Even with reduced population growth (Victoria is growing faster than Queensland, Melbourne and Sydney faster than Brisbane), the state faces above-inflation costs for the two biggest sections (two thirds) of its budget — health and education.
So, just to provide the same level of health to an ageing population and education to the millennial baby boom, as well as increased interest on stabilised debt, there’s going to have to be plenty of cutting and squeezing of the state budget.
And that’s without returning the excess profits from the state electricity providers back to consumers (at the very least a 20 per cent cut in your electricity bill).
And that’s presuming coal prices and volumes hold-up for another decade to prop-up the state’s revenue stream via royalties. (Note: the ALP did not boast to its inner city voters that the budget rode last year on coal royalties and old-fashioned coal-fired electricity profits).
And that’s the most disappointing factor in this election — the lack of honesty about Queensland’s current and future state finances.
While state debt backed by profit-making electricity, ports and toll roads is justified for state development, the debt on $10 billion of south-east Queensland ‘drought proofing’ water pipelines and desalination plant rusting away is a total write-off. Thanks Peter Beattie — must be so much easier being a TV commentator than faking-up state debt as an urban drought saviour.
The last two decades in Queensland have seen so many wasted opportunities (and so much waste).
This is a great state with so many opportunities.
Quite frankly it doesn’t matter if our leaders are empathetic or telegenic.
The test for our leaders should be:
A: They can do basic mathematics; and
B: Have the courage to do what’s right for all Queenslanders, not just mates.
On Saturday, forget the promises, vote for basic competency (even if it is the most competent of a poor choice).