On Wednesday 7 July, the University of Queensland (UQ) Economics School is hosting a panel discussion on the Queensland Rail (QR) sale, featuring heavy hitters Doug McTaggart and John Quiggin.  The brochure / registration form is here:

Panel discussion registration form

This should be a great debate, with strong arguments from both sides.  Though I’m pro-sale, I have some sympathy for Quiggin’s argument that asset sales simply involve a trade of assets between the public and private sectors, so the government isn’t any better off.  It simply replaces one asset on its balance sheet (the utility) with another (cash).  And, if the sale price is too low, the government (and taxpayers) can be worse off.

However, this ignores the reality that the global financial crisis raised doubts about the appetite of global financial markets for the bonds of State and Territory Governments.  With all the US Government Treasury bonds (and those of other countries) being issued, there’s a lot of paper out there that our bonds are competing with, meaning we run the risk of facing some steep borrowing costs.  Selling State assets like QR at least allows the Treasury to get some much-needed cash in the door.  And by limiting the accumulation of Government debt, it should help us get our AAA credit rating back in a few years’ time.