Queensland should snatch reform from jaws of chaos

The political instability around Jackie Trad’s resignation as Deputy Premier and Treasurer could be a cloud with a silver lining for Queenslanders. If Premier Annastacia Palaszczuk and incoming Treasurer Cameron Dick have the vision and drive to seize the initiative, Ms Trad’s resignation, less than five months from the October 31 election, is an opportunity to overhaul Labor’s union-dominated economic approach as the state emerges from the fallout of COVID-19.

Policy settings that encourage business investment, job creation and productivity rather than more government spending and regulation will be the keys to recovery. For Queenslanders, unfortunately, that has not been Labor’s way since Ms Palaszczuk snatched a surprise win from former LNP premier Campbell Newman in 2015. Queensland government debt was soaring towards $90bn months before the coronavirus crisis appeared. A fortnight ago, economist Gene Tunny, a former commonwealth Treasury official and director of Adept Economics, forecast the effects of the pandemic could see state debt hit $100bn by 2023-24.

For two terms, the hallmark of the Palaszczuk government has been growing public service numbers and wages. It has also hired consultants such as former Labor MP and official Mike Kaiser and former premier Anna Bligh’s chief-of-staff Nicole Scurrah to advise on jobs and how to cut the use of consultants. Last year, however, Ms Palaszczuk showed she was capable of pragmatism and changing course when it comes to survival. After years of blocking the central Queensland Adani coalmine, she steamrolled its approval immediately after Labor was clobbered in Queensland in the federal election.

The investigation by the state’s corruption watchdog into Ms Trad’s alleged interference in the appointment of a school principal — which she vehemently denies — is fodder for the LNP opposition. Ms Trad was under assessment by the CCC for several months last year after she failed to properly declare an investment property her family company bought close to a planned station of the $5.4bn Cross River Rail project. She was cleared of corruption but found to have broken ministerial rules. But if the LNP is to take advantage of Labor’s woes, it needs to produce a credible blueprint of its own for rebooting the Queensland economy in the short term and, in the longer term, reducing the government’s mountain of debt. Like Labor, it has ruled out asset sales or leases.

The performance of the Queensland economy, which is the third-largest in the nation and on a par with NSW for export earnings, behind Western Australia, is an important determinant of national prosperity. From Cairns and the Whitsundays to the Gold and Sunshine coasts, Queensland regions that rely heavily on tourism have struggled during the COVID-19 lockdown. With a resumption of international travel months away, their recovery will be hamstrung, even as Australia opens up.

Ms Trad’s departure is a blow to her Left faction, which dominates the government and gained a new member last week when backbencher Jim Madden defected from the Right. The incoming deputy premier, Health Minister Steven Miles, is in the Left. But as the state faces its toughest economic times for decades, pragmatism and not ideology or the whims of public sector unions must prevail. Ms Palaszczuk, as the leader, bears greater responsibility than Ms Trad for the state of Queensland’s books. In looking to the future, she and the new treasurer, like NSW Treasurer Dominic Perrottet, must look to tax reform and scrapping inefficient imposts such as payroll tax and stamp duty. These discourage economic activity. They must also be prepared to stare down unaffordable public sector union wage demands and not stand in the way of workplace relations reform. In the lead-up to the state election and beyond, pro-growth policies will be the path to recovery.