Shadow Treasurer Curtis Pitt says a Labor Government would take a measured approach to paying down debt without losing the $2 billion income stream the LNP will give away through asset sales.
Outlining Labor’s fiscal strategy ‘Our State. Our Assets. A Better way for Queensland’ today, Mr Pitt said Labor’s election commitments could be delivered within the existing revenue settings and with no new or increased taxes and no asset sales.
“There is a better way to pay down debt and deliver election commitments. We do not have to sell off power utilities and port authorities and other assets to achieve that,” he said.
“The LNP’s plan is all about short-changing taxpayers by fattening up income-producing public assets for sale and losing their $2 billion-a-year revenue stream.”
Mr Pitt said even WA’s Liberal Premier, Colin Barnett, — a role model for Campbell Newman — had opposed asset sales in his state because “in the long term those utilities will provide steady income to the state”.
He said the LNP had wasted taxpayers’ funds on scare campaigns claiming the state had a massive debt of “$80 billion” that only asset sales could pay down.
But he said the LNP deliberately included debt held by government-owned businesses even though those same businesses paid off their own debt through revenue received from their customers and generated $2 billion each year in returns to taxpayers for delivering government services.
“The LNP has deliberately inflated the debt figure just to scare people into supporting asset sales,” Mr Pitt said.
“Right now in Queensland, real debt — the debt taxpayers are actually responsible for paying back — is $46 billion. That is known as general government debt.
“The LNP wants to sell off assets and lose a $2 billion revenue stream to pay off what it claims is $25 billion in debt.
“But of that $25 billion, $18 billion is held by government-owned businesses that generate $2 billion a year for taxpayers.
“So the LNP is selling off income-producing assets and punching a $2 billion-a-year hole in the State Budget so it can pay off $7 billion in general government debt for which taxpayers are directly responsible.
“In year seven of its debt action plan Labor would have paid off $7 billion of debt. The LNP’s $7 billion pay-down will happen over a roughly similar time-frame but Labor’s debt action plan does not rely on asset sales.”
Mr Pitt said Labor’s plan was based on:
- keeping income-producing assets;
- quarantining two-thirds of the $2 billion-a-year revenue from government-owned businesses from 2018-19 to pay down general government debt;
- making cost savings through restructuring power industry bodies by merging the current five bodies into a single generating body and a single distribution body with more than $400 million in savings over three years; and
- paying off at least $5.4 billion over six years with a target of $12 billion paid off over 10 years.
“This will exceed the likely general government debt pay-down under the LNP of $7 billion from their record asset sell-off,” he said.
Mr Pitt said the LNP claimed a massive asset sale was the only way to pay off debt and regain Queensland’s AAA credit rating.
However, he said the Commonwealth Bank had clearly stated in a recent report that “…we continue to see a clear path back to AAA for Queensland without asset sales….”.
Mr Pitt said Labor could start paying off debt this year if elected unlike the LNP that would need to wait up to five years for the proceeds of asset sales to flow.
“In this election almost every extravagant promise Campbell Newman makes relies on asset sales,” he said.
“He still hasn’t explained how he will pay for them if — as he himself has warned — asset sales do not go ahead or if the government does not get the price they want.
“He also hasn’t released any business cases or taxpayer-funded scoping studies for them and he hasn’t explained whether all the road projects he is announcing funded by the sale of income-producing assets will need to be funded through tolls or if other projects he has announced will rely on user charges.”