Queensland election: Labor plan to pay down debt will take longer

LABOR has promised to pay down Queensland’s debt without selling assets, but it will take longer than the LNP’s plan.

LABOR ­ has promised to pay down Queensland’s debt without selling assets, but it will take longer than under the Liberal National Party’s privatisation plan and delay the restoration of the state’s prized AAA credit rating.

Releasing its long-awaited fiscal strategy in Brisbane yesterday, the opposition also promised a return to surplus next financial year, no new taxes or increased taxes, and the merging of five government-owned power companies into two, creating annual savings of $150 million.

However, the central plank of Labor’s plan — quarantining two-thirds of the $2 billion in annual revenue generated by the assets to pay down debt — was criticised as economic trickery by the government.

Treasurer Tim Nicholls said: “It’s nothing more than sleight of hand (and) attempts to spend the same money twice, or in some cases three times.”

Currently, that revenue is used to pay down the interest on the state’s debt, but Mr Nicholls ­argues that under the Labor plan, the money is effectively being spent twice: to pay down both the interest on the debt and reduce the principal.

Labor yesterday vehemently restated its objection to the LNP’s plan to privatise $37bn worth of assets, including the ports at Townsville and Gladstone and government-owned power companies, to pay down debt by $25bn and fund $8.6bn in infrastructure investment.

Opposition Treasury spokesman Curtis Pitt said Labor would reduce the $46bn in general government debt — a measure which does not include the liabilities of government-owned corporations — first with the merging of the power companies and then with a “debt action plan”. The quarantining plan, which would begin after the forward estimates, would pay down debt by $5.4bn over six years and $12bn over a decade.

“Those government-owned businesses are paying down their own debt,” Mr Pitt said.

“Over the forward estimates … we will be paying down $400m out of the proceeds of efficiencies that we’ll gain from consolidating our energy businesses,” Mr Pitt said.

Under a Labor government, three government-owned power distribution network businesses, Ergon, Energex and Powerlink, will be merged into one business. And two energy generators — CS Energy and Stanwell — will also be merged. Mr Pitt said there would be a reduction in board positions from 34 to 16, and a drop in senior managers, human resources and administration staff, without forced redundancies.

Mr Pitt also took credit for the surge in growth Queensland was expecting on the back of the beginning of liquid natural gas exports from Gladstone, saying the industry was booming thanks to the actions of forward-thinking Labor premiers.