Editorial: Desperate thought bubble treats voters like mugs

Steven Miles’ crazy plan to establish state-run petrol stations shows a remarkable indifference to the lessons of history, writes the editor.

Brett Lethbridge editorial cartoon as Premier Steven Miles floats idea of state-owned service stations

The last time a Queensland Labor government tried to force down prices by establishing its own state-run businesses was more than a century ago – “Socialism at work!” the Labor Party newspaper, The Worker, declared at the time.

That breathless excitement from local socialists in 1915 was due to Labor premier T.J. Ryan promising to improve the living standards of Queenslanders by opening a string of state-owned businesses – from butcher shops and fish canneries, to cattle stations and hotels. A worker’s paradise!

Unsurprisingly, however, most of these new state enterprises quickly lost money and survived only with ongoing taxpayer funding. Premier Ryan stepped down in 1918, and while his Labor Party remained in office until 1929, within a decade many of the state-owned businesses were sold off.

It is impossible to see a different outcome from the current Labor Premier Steven Miles’s bewildering and barely costed plan to open up to a dozen state-owned fuel retailers to compete with businesses “where competition is most needed”.

It is a desperate thought bubble that treats voters like mugs and shows a remarkable indifference to the lessons of history.

It has also been proposed without any modelling or research, a truth Mr Miles acknowledged yesterday – conceding that as “an election commitment” the plan “hasn’t been produced by the public service”.

But surely even the most bizarre of promises made by a government deserves at least a cursory
cost-benefit analysis, beyond his initial and no-doubt spectacular rubbery cost of $36m “to be funded by borrowings in the government-owned corporations sector”.

Yep, he even plans to borrow cash to set up state-run businesses!

Premier Steven Miles (front) with Treasurer Cameron Dick on Tuesday. Picture: Lyndon Mechielsen

The Premier’s thought bubble boils down to a complicated and expensive and unpredictable plan to try to manipulate the free market by using taxpayer cash to artificially cap prices. Who said communism failed? It seems Marxism is very much alive and well in the mind of the man who in less than 100 days is asking Queenslanders for another four years in power.

As the century-ago experience of the Ryan administration shows – along with countless other efforts over the years by other leaders here and abroad – government attempts to control prices by intervening in the market inevitably fail.

Mr Miles says his publicly owned fuel stations – “Steven’s Servos” as we dubbed them on the front page yesterday – would operate on a cost-recovery basis.

But that means nothing if your costs are higher than your private sector competition, as they surely would be, considering they would presumably be staffed by unionised public servants on generous terms and conditions. Who knows, they might even get their own version of the CFMEU-brokered Best Practice Industry Conditions (BPICs) via which the government is already paying traffic controllers upwards of $200,000 a year – what would it hurt to add a few dozen service station attendants?

Economist Saul Eslake succinctly captured the mood of pretty well every independent observer to the Premier’s plan yesterday, when he described it as a “a crude, populist, low-rent gimmick that should be seen as such”.

AMP Capital chief economist Shane Oliver added that it was simply “bonkers” – before adding the very pertinent point that a government worried about a lack of competition being the reason petrol was more expensive in Queensland than other states should be making it easier for independents and small retailers to enter the market, rather than rocking up themselves as the sector’s new 800-pound gorilla.

The petrol price scheme has been universally panned.

And as for the Premier’s other promise yesterday of a legislated daily petrol price rise cap, we take note of the warning from the chief executive of the Convenience and Petroleum Marketers Association Mark McKenzie, who says it would actively kill off any small independent retailers, as they relied on the weekly fuel price cycles for their small profit margins.

It is as if the Premier has gone looking for a policy that is likely to have the opposite effect to that intended. On that measure, it is impressive.

Rising and unpredictable fuel prices are a significant component of the cost-of-living pressures blighting Queenslanders, and so we do understand why a desperate Premier on the eve of an election he is expected to lose would be willing to promise anything to be seen to be doing something about it. Heck, he recently blew more than the cost of a new stadium giving us all one-off $1000 power bill rebates. This is positively tame in comparison.

But trying to compete head-on with the private sector in this way is a total waste of taxpayer money.

This type of intervention in the market has failed as many times as it has been attempted.

Queenslanders are smarter than this Premier gives them credit for. They will see right through this. It reeks of desperation; of a politician putting winning the election ahead of responsible leadership.

It is the silliest proposal seen in Queensland public life since the LNP’s still-truly bizarre attempt to win over the people of Townsville at the last election by promising to impose an after-dark curfew on the entire city. It was an epic fail. There is no reason to think this epic brain fart will not join it in that category.

An earlier version of this incorrectly stated that Premier T.J Ryan and the Labor Party lost the 1918 election.

Responsibility for election comment is taken by Chris Jones, corner of Mayne Rd & Campbell St, Bowen Hills, Qld 4006. Printed and published by NEWSQUEENSLAND (ACN 009 661 778). Contact details here