Queensland Nickel bailout would have been dangerous precedent: Treasurer

QUEENSLAND’S Treasurer has defended his decision not to bail out Clive Palmer’s Queensland Nickel, even though it could cost the Government more in the long run.

Treasurer Curtis Pitt will provide some brief initial comments on the Queensland Productivity CommissionÕs draft report on electricity pricing. Pic Tim Marsden

QUEENSLAND’S Treasurer has defended his decision not to bail out Clive Palmer’s Queensland Nickel (QNI) before it went into administration, even though it could cost the Government more in the long run.

Mr Palmer sought a $35 million loan guarantee from the State Government to help his cash-strapped Townsville refinery, which had been struggling due to low commodity prices.

But the State Government refused because QNI wouldn’t let bureaucrats look at its books and, earlier this month, the company sacked 237 workers and went into voluntary administration.

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Treasurer Curtis Pitt said offering government assistance to the ailing company could have set a dangerous precedent.

“If we were to have given that sort of support to this private firm, then it opens the floodgates for us to deal with all,” he said today.

However, if QNI does go under, the Government will have to pay for expensive environmental clean-ups at the site.

Administrators FTI Consulting have already said QNI has enough cash to operate until April 30, but will require a huge cash injection to continue running after that.

Mr Pitt said he had “some understanding” of what the clean-up costs would be to the state, but didn’t want to reveal it.

“I’m not going to be giving you any specific figures today, I think it would be irresponsible to give you a figure and then say it’s going to be more or less than that in the future,” he said. “Needless to say, it would be correct to say that the government is going to have to play a key role in any environmental clean-up in the future.”

Treasurer Curtis Pitt says bailing out Queensland Nickel would have set a dangerous precedent. Pic: Tim Marsden

However, Mr Pitt said he didn’t think he made the wrong decision in rejecting Mr Palmer’s plea for help, even if the clean-up costs were far higher than the $35 million loan guarantee being sought.

“You can talk about the comparative cost of any direct assistance we may have provided versus potential clean-up,” he said.

“(But) I’d argue you look at the potential costs of what it would be to the state if we were to be opened up to that sort of assistance for any company that was going under.”

Mr Pitt said the Government wanted to see QNI continue to trade and employees receive entitlements owed to them.