Queensland: open for business


The Queensland state budget delivered on June 14 has confirmed again the state Labor government’s willingness to pander to the needs of big business, while workers pick up the tab for the sell-off of large chunks of the state’s infrastructure. In a post-budget media event, Queensland Premier Anna Bligh beamed as she announced: “The sun has come back to the sunshine state”. But it is shining only on big capital.

The budget predicts further deepening of Queensland’s debt for the next few years, despite the sell-off of assets over the last year, including Queensland Rail, State Forestry and the port of Brisbane, among other key state-owned infrastructure. This massive sell-off and privatisation allowed the Bligh government to reduce debt from $70.3 billion to $52.8 billion in 2010-11. It is expected, however, that debt will reach around 24% of gross state product by 2013-14. By 2014-15 debt of the state is expected to total $84.9 billion, an increase of more than $30 billion from the current year. Just the interest on the debt will require payments of $100 million a week.

In defending the slide into even further debt, treasurer Andrew Fraser claimed Queensland will be “marching back to surplus in 2015-16”. The key strategy for reaching this surplus rests almost entirely on the continuation of the resources boom, coupled with further assets sales and cutbacks on public expenditure.

Attacks on services

Predictably, the Liberal National Party (LNP) opposition hit back with “the figures don’t add-up” commentary. Along with the corporate sector, it wants the cutbacks to public services and privatisation to be broadened and fast-tracked. Queensland Chamber of Commerce spokesperson David Goodwin told reporters: “Fundamentally, we have to start living within our means”.

In the lead-up to the budget, the Courier Mail ran a drawn-out campaign against “fat cats” in the state public service and “golden handshake” payouts to the many thousands that the state government plans to make redundant over the next year. At least 3500 voluntary redundancies have been offered, and this number is expected to rise, along with outright retrenchment. In addition, many local councils are shedding staff, in part as a result of the state government’s botched water reform. Meanwhile, the state’s health and education continue to go from bad to worse, as waiting lists for hospital beds lengthen and schools continue to struggle with inadequate resources and staffing. Fraser has also flatly ruled out any of the pay claims put forward by public sector unions (most seeking increases of 4.5%), stating that the most the government will consider is 2.5%.

There was hardly a peep from any trade unions in response to the budget and the likely impact it will have on workers. The chest-beating of some union heavies in opposition to privatisation has come to naught, apart from a few tightly controlled rallies and some fading billboards. The traditional May Day rally was dull and down on numbers this year, and the issue of state asset sell-offs was nowhere to be seen. Perhaps the Queensland Council of Unions knew of the impending $1.89 billion sale of the 99-year lease for the Abbot Point coal terminal, announced on May 4. The future expansion of the port will cause it to remain one of the largest coal handling terminals in the world and provide a profit of many, many billions to Indian mining and exporter-importer giant Adani Group.

As a sweetener coming into the state election (due by the end of March 2012), the budget provides an incentive for first home buyers in the form of a one-off $10,000 grant, if a new home contract is signed between August and January next year. It is also hoped the grant will provide some stimulus to the home construction and development industry, which has remained in a slump since the financial crisis of 2008. There are also some increases in pensioner rebates for water and electricity, but these will be more than soaked up by the expected price hikes for these essentials.

Fading credibility

It is questionable whether the budget will help the Bligh government and state Labor regain political credibility among voters. The one thing to Labor’s advantage is the general ineptitude of the LNP, despite the populist appeal of new LNP leader Campbell Newman. Bligh was able to partially restore support for her administration during the emergency response to the flood and cyclone disasters that hit Queensland earlier in the year. A lot of this credibility has worn thin over the last few months. The lack of transparency in the public hearings into the flood disaster, along with the painfully slow release of government assistance on top of the callous treatment from insurance companies, has left many disaster victims and the broader community deeply angered.

Flood and cyclone-affected towns and centres are still struggling with loss of infrastructure, loss of income and subsequent social breakdown. Counselling and financial services in many rural areas cannot meet the needs of families affected by the disasters, resulting in an increase in family breakdowns and depression. This is taking place within a broader economic and social setting in which the big mining, construction and finance companies are making super-profits while workers’ cost of living is going through the roof.

One indicator of how hard many workers are doing it in Queensland, despite the resources boom, is in the housing market. According to the Fitch ratings agency, the highest percentage of mortgage defaulters nationally live in Logan City in south-east Queensland. One in fifty mortgage holders in Queensland is in arrears by 30 days or more. The Queensland Council of Social Services recently released a report detailing the real cost of living in the state. The “Cost of Living Report 2011” found that essential household items in Brisbane have risen sharply in the last five years. This includes food (23%), rent (35%), public transport (48%) and electricity, gas and water (63%).

Coal and gas exploration companies and associated construction firms, however, have never had it so good in Queensland, except for the corrupt, despotic years of the Joh Bjelke-Petersen government. Despite deepening concerns about the serious adverse environmental impacts of coal seam gas, the industry is being granted special treatment and assistance by the state government. On May 27 the first stage of the $15 billion Gladstone LNG plant on Curtis Island was officially launched by Bligh and Prime Minister Julia Gillard. A few days later the state government confirmed the expansion of Abbot Point to house an additional six coal export terminals at a cost of $6.2 billion. Queensland (still), open for business.

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