A Twitter incident from Wednesday last week reveals a few interesting things about the Queensland state government and modern politics overall.
I’m regularly on-air with Steve Austin at 5:30 pm on Brisbane ABC radio each Wednesday discussing state politics with Rachel Nolan. If you’ve ever listened in you’ll know it is a pretty freewheeling conversation and both of us are called on to express opinions on a wide range of subjects.
If you listen to last week’s episode around 2:14 you’ll hear me unload on Scott Morrison’s financial profligacy in reacting to COVID-19 ($800 billion in additional debt by 2030 according to the Parliamentary Budget Office). I follow this up by riffing on Victoria’s debt, announced in their state budget.
I’d glossed a news report and got the Victorian figure more or less right at $156 billion in 2024, but didn’t realise it was net debt, rather than gross debt. I compared it to Queensland’s gross debt of around $118 billion in 2024 (according to our report produced during the election).
For some reason best known to himself, three hours later, on a parliamentary sitting day, Cameron Dick, State Treasurer, decided to tweet, calling me out for quoting net debt against gross debt. He pointed out the gross Victorian figure was $196 billion and quoted Queensland’s as $102 billion.
This made Queensland’s position look even better, which was fine by me because my point was that Victoria had jumped the shark, and while Queensland was bad, it was nothing like Victoria. So he drew attention to his own poor debt position for no rhetorical advantage
But it gets worse for Dick. If you’re going to be pedantic, and have the whole resources of treasury behind you, then you should make sure you haven’t made any mistakes yourself. The Victorian figure is for 2024, but the figure Dick quoted for Queensland is this year’s – a case of comparing lemons against limes, which I was happy to point out.
Unlike Dick, I had a 2024 Queensland debt figure because after he had refused to provide one during the election we at the Australian Institute for Progress commissioned Gene Tunny and Joe Branigan to work it out for him, which we released as “Queensland Budget Update Report”.
This minor skirmish tells us a lot about this government.
It is obsessed with intimidating critics, to the point that it will criticise a critic even when it means revealing its own shortcomings. Despite having a huge number of staff, most aren’t competent.
(Perhaps this is because it does have a huge staff: too many with too little to do lured into manufacturing work like encouraging their boss to tweet when he has nothing substantive to say, or perhaps grabbing the password to the social media account and doing it themselves).
There is also a lot of misdirection going on here. By arguing about debt, and comparing it to other states, it deflects commentators from other aspects of the budget.
On my calculations, COVID has cost Queensland about $12 to $14 billion, as a result of a combined drop in income and increase in expenses. Add that to existing gross debt and you get $114 to $116 billion, close to the figure our consultants got in their review. With state gross debt to hit $130 billion, there is up to $18 billion in additional deficits.
What is causing that? Is it a deterioration in state revenue? No. State revenue will have recovered to where it was estimated to be in the 2018-19 budget by 22-23.
This is despite a significant fall in royalties (mostly coal) in the next two years, and a decline in income from government-owned corporations, some of which, like the electricity generating and distributing assets, loaded-up with state debt, look to be in serious decline.
It looks like privatising the “wires and poles” would have been a brilliant, strategic, top-of-the-market move when mooted by the Newman government. Now the treasurer disingenuously claims Queensland’s non-privatised assets are going to pay for the state’s debt.
So it must be expenditure, but which parts of expenditure? Most of it will be wages, up 13% by 2024 from actuals in 2019-20, a gross figure of $3.3 billion per year, or most of your additional deficits of $18 billion.
Then there’s another half a billion for debt servicing per year, compared to 2019-20 and depreciation up $738 million per year compared to the same period.
The debt might have been excusable if it were being applied to infrastructure projects that would significantly lift state productivity. That is not to be, with infrastructure spending over the period of $56 billion about $1.5 billion a year higher than previously.
The debt might be manageable if the state was planning to run an operating surplus anytime soon, but at the end of this 4-year period it expects to still have $1.4 billion more expenses than revenue per year, with no plan to pay back debt.
Dick’s not worried, because interest rates are so low. I hope his kids are so sanguine. Rates can’t stay low forever, and when they rise you can’t just borrow the difference. Someone will have to pay at some time in the future.
Dick is big on symbolism and imagery. His social media stream is full of heroic images of himself, one of which taken yesterday morning before delivering the budget was identified by The Courier Mail as aping another by Barack Obama.
The Courier thinks this budget marks the beginning of his run for premier. If it does, then its symbolism is of a status quo government that has given up on reform or progress, in favour of staying in power. Pandering to government employees, and strategically targeting modest amounts of infrastructure at electorally critical constituencies, rather than improving economic systems to the benefit of all.
In another act of symbolism, Dick talked about his father, whose successful butcher shop sent his two sons to the elite Church of England Grammar school in East Brisbane.
While draped in the heritage of small business, the treasurer seems to have learned little from it. The secret to small business is to out-compete your competitor by offering a good product at an affordable price. Part of that involves screwing all your costs as tight as you can, and not borrowing money without ensuring it will return more than it costs and without a plan to pay it back.
Queensland might get better returns if, instead of a social media strategy, Cameron Dick communications strategy to talk with, rather than at, those of his constituents who return the profits that pay state revenue. They could tell him this budget is all wrong.
It’s no excuse that no other state Treasurer appears to have a clue either.
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