Sell assets to pay off debts: Costello to Qld

Campbell Newman

Pressure is building on Premier Newman to announce that how will his government deal with Queensland’s debt crisis. SOURCE: ABC

By Mehroz Siraj

Former Treasurer Peter Costello has said that the Queensland government needs to prepare plans for privatizing state owned resources to pay off its debts otherwise its credit ratings could be further downgraded by Australian and international agencies.

Queensland’s current debt stands at $79billion, ABC Radio reported on April 29.

Costello was the head of a four member committee that was assigned the task of auditing Queensland’s books.

The committee would present its detailed 1,000 page report to the state government on April 30 and it contained close to 155 recommendations, ABC Radio reported.

Costello told ABC Radio that selling off state-owned assets such as power units was the only viable way through which the state government could pay off the astronomical debts that had been incurred under the Labor government of Premier Anna Bligh.

“Well the other alternatives are massive tax hikes or massive service cuts,” Costello said, when asked if there was any other way to pay off the debts.

Costello however clarified that neither of these two options were advisable and that these alternatives were not supported by the committee that he was heading.

Addressing the gravity of the situation, Queensland premier Campbell Newman said that for his government, this was not just about privatization, but about taking up a broader range of financial reforms.

While talking to ABC Radio’s Stephanie Smail, he said that he would not accept the report’s recommendations single handedly as the fate of the report was to be decided by the entire state cabinet and Liberal National Party (LNP) members in the state parliament.

Considering the severity of the situation, Newman however said that his government would engage in a massive public relations campaign aimed at alleviating the concerns that Queenslanders had regarding privatization of state assets.

He however maintained that the important power and energy companies of the state would not be sold off.

As part of the planned public relations approach, Queensland parliamentarians were only delivered the report only 24 hours before its scheduled public release, ABC Radio reported.

This approach was strongly condemned and criticized by the state Labor’s Curtis Pitt.

Commenting about the late delivery of the report to the backbenchers, he said that many of them were first-term members and they had been manipulated by the government.

“I think they are not going to have the time they need to look at this with any sort of a clear head before the Parliament starts this week,” he further added while talking to ABC Radio.

“They are certainly not going to be in any position to provide responses back to their local communities because they’ve just been given this at the last minute,” he informed.

Privatizing state assets for the purposes of generating revenue had been previously employed in Victoria and New South Wales (NSW).

In both states, the incumbent premiers of the time had to pay a heavy cost for going ahead with the privatization of state assets and services.

In NSW, three Labor premiers lost power till the 2011 state elections in their fights with the opposition, the people and unions over the controversial privatization of energy companies and power generation assets.

In Victoria, premiers John Brumby and Ted Bailieu faced strong criticisms from the voters over their privatization of many services within various state government departments.


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One comment

  1. Hi,
    It is a very common question today is that to sell off current assets to pay off debt? Selling off assets is never an easy decision, but the alternatives today are much worse. So all hope for best.
    Thanks for Post.

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