‘Inept’ Treasurer pulls a $3.2 billion swifty
CONTROVERSIAL Treasurer Jackie Trad has pulled another swifty, setting up a $3.2 billion line of credit ahead of a looming state election due in October.
The emergency funding came courtesy of the Appropriation (COVID-19) Bill 2020.
It gives Premier Annastacia Palaszczuk and Trad the legislative approval to raid taxpayer funds for stimulus packages.
In giving itself an extraordinary cash advance, the dysfunctional State Labor Government has bypassed the accountability process. It won't have to face the usual Estimates committee scrutiny. This is because there won't be a Budget before the election.
Queensland will be the only state not to have a Budget this year, leaving little doubt that Palaszczuk and Trad fear an examination of the state's finances. Instead there are vague suggestions there will be a "financial statement".
It's hard to disagree with shadow treasurer Tim Mander, who said the lack of accountability around the deal was an abuse of power.
"Failing to deliver a budget before the election shows the only jobs Annastacia Palaszczuk and Jackie Trad care about are their own,'' he said.
As Trad and Palaszczuk spend taxpayers' money on pet projects, economists are predicting the state's debt will soar past $100 billion within two years.
Will Labor get away with it? Perhaps. The LNP Opposition will find it difficult to campaign against spending to kickstart the economy.
Trad was quick to use the coronavirus pandemic to mask her own fiscal ineptitude.
In explanatory notes presented to Parliament, the line of credit was explained this way: "The current COVID-19 crisis is causing unprecedented economic and fiscal challenges all over the world. It is affecting governments, industry, business, households and individuals.
"To protect jobs and safeguard our economy, the Queensland Government has announced a COVID-19 relief package."
And while Labor gathers funds for its pet projects, it refuses to offer relief grants to struggling small businesses.
Victoria, NSW, South Australia and Western Australia have all introduced grants from $10,000 to $17,500 for small businesses.
Five years of recklessly and imprudent management by Trad left the Queensland economy in a bad place well before the virus hit.
If the Queensland economy was a hospital patient it would be on a ventilator.
Gene Tunny, an economist with Adept Economics, charts the decline of Queensland's economic standing in his book Beautiful One Day, Broke the Next, (Connor Court).
He says the last Labor premier to show any fiscal acumen was Wayne Goss, who sagely followed the conservative model laid down by legendary under-treasurer Sir Leo Hielscher.
Tunny speaks with authority. He previously worked in the Commonwealth Treasury and then in the Queensland public service in various departments.
He believes there is a risk the "treasurer's advance" will be used for "wasteful or politically motivated projects".
Yet he sees some justification for stimulus projects given the rapid deterioration of the economy.
"Some regions of Queensland, especially those highly dependent on tourism such as Cairns, the Whitsundays and parts of the Gold and Sunshine coasts, will experience mini-economic depressions," he told me.
"The challenge will be to balance the need for rapid and flexible policy responses with the need for political oversight, so we avoid pork-barrelling and rorting.
"The Queensland Government was already forecasting a $4 billion deficit this year prior to learning about coronavirus, and every extra dollar we spend adds to the total state debt, which will no doubt end up at over $100 billion in a few years' time.
"To service that debt, the State Government needs to make interest payments to bond holders, payments which subtract directly from the budget."
Therefore, Queensland would have to raise taxes or cut health and education spending.
"Queensland general government interest payments currently cost the budget $1.5 billion each year and that cost will keep rising as we pile on more debt," Tunny said.
"That interest cost was only around $200 million per year in the early 2000s.
"The Queensland Government should have been prudent in earlier years and avoided running up so much additional debt. The Government has been too willing to borrow-to-build, often funding marginal projects such as Cross River Rail. It has been unaware of future risks that could blow out the debt even further."
He said Queensland "lost its way" in the mid-2000s.
"Queensland's loss of fiscal discipline has led to a bloated public service," Tunny said.
True. At the core of the problem, I believe, is Trad's pandering to excessive union wage demands for public servants. The latest figures show Queensland spends more on public sector employees per capita than any other state government.
So a growing proportion of taxes, royalties and other revenue is devoted to wages. Shamefully, Queensland spends about the same on public servants' wages as Victoria - a state with 30 per cent more people.
Queensland's wealth has traditionally flowed from the quarry and the farm.
That makes Trad a bad choice as treasurer. She is an inner-city lefty with no affinity for rural or regional Queenslanders. And she not only dislikes miners; she is antagonistic against the resources industry.
Trad has some tough questions to answer.
It's about time the media started asking them.
Originally published as 'Inept' Treasurer pulls a $3.2 billion swifty