Queensland election: Floods payout risks blowing $1bn hole in state finances
Dam class action threatens Queensland’s budget, as Treasurer Cameron Dick insists the state will be out of recession next year.
The Wivenhoe Dam class action payout could blow a $1bn hole in Queensland’s already stricken budget, as Treasurer Cameron Dick insisted the state will be out of recession next year.
In the first official estimate of compensation owed to the victims of the 2011 flood — who last year won a landmark class action against the government and two state-owned dam operators — dam-operator Sunwater has estimated its share is $330m. Sunwater is liable for 30 per cent of the damages — if its appeal fails — meaning the state’s total bill could be $1bn.
The government is not insured, but dam operators Sunwater and Seqwater are, though at least one is believed to be in a legal battle with its insurers.
Sunwater’s annual report, tabled in parliament, says the statutory authority’s full-year return on average assets is “negative 25 per cent, primarily due to the $330m compensation provision for the 2011 southeast Queensland floods class action”.
The authority says that will be payable if it loses its appeal.
Lawyers Maurice Blackburn, representing flood victims, recently revealed mediation talks had failed with the government and the dam operators, meaning there will not be a settlement. Victims may need to wait years before they see any money, despite Premier Annastacia Palaszczuk last year saying the government did not want to drag out the pain.
Sunwater and Seqwater have appealed the Supreme Court judgment, but the state government has not. However, Maurice Blackburn says the government is trying to piggy-back onto any appeal win by the operators to avoid paying its share of compensation.
The possible $1bn bill emerged as Mr Dick said he believed the state could pull itself out of recession next year. He also ruled out new or increased taxes for four years if Labor is re-elected.
Mr Dick has moved to weaponise borrowing and debt during the election campaign, criticising the LNP opposition for insisting it could bring the budget back into surplus and it would stabilise debt.
Labor has flagged it will borrow an extra $4bn to pay for its campaign promises, on top of existing borrowing for infrastructure funding. Mr Dick and Premier Annastacia Palaszczuk announced a new $1bn fund to improve school infrastructure on Friday, all of which will be borrowed.
Of the $1bn, $415m will come from the $4bn extra borrowings Mr Dick announced in September. But he said there was no shame in borrowing to build.
“The budget is in deficit, that’s the reality. But we are borrowing to create more jobs for Queenslanders,” he said. “We’re going to go back into economic growth next year. We look to see a 3.75 per cent growth in the economy in calendar year 2021.”
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