Unsurprisingly, the Peter Costello-led Queensland Commission of Audit has recommended privatisation of a large number of Queensland Government assets, as reported in the Courier-Mail this morning:
SELL assets or spend the next half a century paying off debt.
That is the stark choice presented to the Newman Government by the final Commission of Audit report into the state’s finances.
The Courier-Mail can reveal the report by former federal treasurer Peter Costello, delivered yesterday, has recommended the state undertake a massive sale of assets to pay off burgeoning debt.
The report found there was no scope to increase taxes or cut expenditure, while the sale of electricity assets, including Energex and Ergon, would raise the $25 billion to $30 billion necessary to reclaim Queensland’s AAA credit rating.
The state should also consider selling some of its other seven government-owned corporations, which include Queensland Investment Corporation, and SunWater.
As the report makes clear, if it wants to restore our AAA credit rating in the next few years, the Government really doesn’t have much of an alternative to asset sales and should embrace the Commission’s recommendations. Without asset sales, it would take a long time to get back our AAA rating, as discussed in my previous post:
When will Queensland get its AAA credit rating back?
While some commentators will criticise the Government for selling income generating assets, they fail to see the short-term benefits in helping to regain our AAA credit rating (lowering our borrowing costs) and the fact many of these businesses would be much better run by the private sector (improving productivity). I hope the Government releases the report as soon as possible in the interests of a fully informed public debate.
My previous posts on privatisation of Queensland Government assets include:
Why is QIC government owned anyway?