Costello report tabled: No sell out on energy distribution companies, says Newman


Premier Newman with a copy of the audit committee’s report. SOURCE: ABC

By Mehroz Siraj

Queensland premier Campbell Newman and his government have endorsed the Costello committee report, however, the premier ruled out any sell out of government businesses, particularly the state’s power distribution companies.

The audit report that had been in the works for over a year was finally tabled in the Queensland state parliament on April 30.

The three member committee that prepared the report was headed by former Federal Treasurer Peter Costello.

It was assigned the task of studying Queensland’s clogged financial and public sector situation and proposing relevant reforms to the state government.

“Let me be absolutely clear today that we have decided to not consider divestment of Energex, Ergon or Powerlink to pay down debt that was accrued by the former financially inept government,” he told the parliament.

His comments came in response to the growing media frenzy about the relevant recommendations of the audit report that called for privatization of the state’s power distribution companies.

The report recommended privatization of power distribution resources as it is believed that the massive handover of power infrastructure to private companies would raise good revenue for the state government.

This revenue could then be diverted towards paying off the state’s astronomical debts, the report said.

The audit report presented by the committee had a total of 155 recommendations and only five of them pertained to the power sector.

The rest of the reported detailed about the required reforms in other areas of the Queensland public service.

The state government endorsed the other major recommendation that power generating units across the state be divested from their non-core businesses, such as coal extraction.

This divesting, according to the report, would enable power generation and distribution companies to work to their maximum efficiencies in fulfilling their main responsibilities towards Queenslanders.

In one of its recommendations, the report said that privatization of the power generation utilities would help reduce the inefficiencies of the system and would assist in cutting production costs.

In its written response to this proposal that was published online, the state government said that it could only accept this suggestion after a long public debate about the merits and demerits of privatizing these facilities.

In its other recommendations, the audit report called for an overhaul of the Queensland public sector whilst laying primary emphasis on the privatization of state assets.

These included government schools, port facilities and the state’s public transport networks as well.

The report called for the privatization of public transport across the state, with special attention given to long-distance train routes and bus services across regional Queensland.

The report however maintained that privatization should be undertaken only with the aim of leasing out maintenance work across the state’s public transport and freight infrastructure.

Overall ownership of these assets would still lie with the government, as mentioned in the report.

The report recommended that Queensland Rail be given the overall administrative controls of the state’s railway infrastructure.

While the Newman government accepted these recommendations in their original spirit, it said that it required more time and analysis before commenting on the report’s proposed privatization of the state’s port facilities.

In its written response to the report’s recommendations of privatizing the freight loading and maintenance works at the Gladstone and Townsville ports, the government announced that it required more time to debate and analyse these proposals.

It also said that as these ports were government owned businesses, no decision would be taken on privatizing them in the absence of a clear mandate from the people of Queensland.

While addressing the state parliament on April 30, Premier Newman and state treasurer, Tim Nicholls praised the hard-work and efforts that the three member committee had put in towards preparing this report.

They however accepted that due to a number of political and economic factors, all of the report’s recommendations could not be accepted.

They also remarked that many of the report’s proposals regarding privatization of government businesses required more in-depth public debate and consensus without which a decision could not be taken.

The tabling of the report in the state parliament was preceded by detailed meetings of state government officials and a diligent media blitz by Premier Newman.

In his previous talks with the Brisbane based Courier Mail and the Australian Broadcasting Corporation (ABC), the premier had sought to lay all the blame for the state’s current situation to the previous Labor government of premier Anna Bligh.

While the Newman and Treasurer Nicholls have praised the audit report for its visionary approach, they severely criticized the former Labor government for spending excessively without working towards increasing revenue generation.

Queensland’s Labor parliamentarians however rejected these allegations in the parliament and demanded a more serious approach towards governance from Premier Newman and his government.

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