Queensland government’s Star offer has to be one-off deal

Steven Miles has a compelling reason to grant Star a lifeline, but for the sake of taxpayers, it simply cannot become a precedent, writes The Editor.

• Premier’s gamble: Bid to save jobs

The Queensland government’s likely decision to throw a financial lifeline to Star Entertainment Group – the operator of Brisbane’s new casino – by the way of deferred tax payments is justifiable as a one-off in the unusual circumstances, as we said here yesterday.

But it cannot become a precedent that encourages other struggling businesses to try to tap taxpayers for a leg-up during hard times.

Governments should never become the banker of last resort. Using public money just to keep a company or project alive should be the rare exception – no matter how compelling the politically attractive temptation to protect a few jobs.

Governments regularly support private sector businesses for all sorts of reasons – from encouraging new industries to underwriting job growth in the regions. But the key question must always be what is in it for taxpayers, rather than what is the benefit to the politicians or the companies involved.

Premier Steven Miles in Brisbane this week. Picture: NewsWire / Glenn Campbell

On this measure, Premier Steven Miles does have a compelling reason for granting Star temporary payroll and gambling tax relief: that the company’s just-opened $3.6bn Queen’s Wharf precinct is simply too big – and too important to Brisbane’s economy – to fail.

It is of course enormously galling that taxpayers might be about to assist a gaming company whose financial troubles are largely of its own making. Star’s financial health has been seriously dented by an entirely necessary crackdown on alleged money-laundering and illegal behaviour in and around casinos – as well as delays and cost blowouts on its Brisbane project (the irony is not lost on us that most of those issues have been caused by the militant construction union the CFMEU, whose outrageous claims on other public works have been waved through time and again recent years by the Labor state government now led by Mr Miles).

Premier Miles would be within his rights to tell Star to sod off. But, as he said on Tuesday, the Queen’s Wharf precinct “is a fantastic asset for our city” – as a generator of jobs (another aside worth mentioning is that the majority of those workers would be members of the United Workers Union, whose boss Garry Bullock orchestrated Mr Miles’s ascension to the Labor leadership).

As we say, the Star lifeline can be justified. But it cannot become a precedent – particularly as we look forward over the next decade, when the world’s carpetbaggers and big-talking shonks will be eyeing off the riches always on offer in cities that are about to host an Olympics.

Governments generally should quarantine their investments in private enterprise to the support of growth sectors in general, rather than picking individual winners.

And on that, this government has some form – from its decision last year to take over the Copperstring project to link Mount Isa to the national grid at Townsville (a project long backed by the crossbenchers in the Katter’s Australia Party), to its recent “support package” to multi-billion dollar mining company Rio Tinto to keep its operations in the Labor-held electorate of Gladstone.

Four years ago – in the midst (and in the mists, you could fairly say) of the pandemic – Treasurer Cameron Dick chipped in $200 million to keep Virgin Airlines flying, and headquartered in Brisbane, after it went into voluntary receivership.

The risk with taxpayer-funded deals direct with single companies is those that miss out can rightly ask why they did not receive a leg-up.

The political risk is voters asking similar questions of their leaders. After all, it is their money.

And so we urge vigilance, lest Premier Miles or Treasurer Dick get sweet-talked by others who have been encouraged by the deals done to try their own luck wrangling some cash out of the government.

TOUGH BUT FAIR FROM RESERVE BANK BOSS

Michele Bullock is simply speaking the truth when she says an extended period of time where interest rates are higher than expected will see at least some homeowners having to sell up.

But, wow, it is quite a moment when you hear the Reserve Bank governor put this truth as plainly as she did yesterday, when she said some Australians struggling to make ends meet as interest rates remain at their current 13-year high “may ultimately make the difficult decision to sell their homes”.

As we report on the front page today, Ms Bullock told a Sydney lunch that about 5 per cent of Australian borrowers had essential spending and mortgage repayments that added up to more than their incomes – and so would be having to make “quite painful adjustments” in coming months.

But she made no apologies for that, saying the chief risk to households was inflation – and the only way to tame that dragon was through keeping rates high.

Ms Bullock is proving to be just what is needed in a Reserve Bank governor – she understands the impact of her decisions on ordinary Australian households but has the strength to hold firm to the course she and her board think is right.

Originally published as Queensland government’s Star offer has to be one-off deal