Failure of Strong Choices now obvious – missed chance to persuade on asset sales

The Queensland Government should have directly made the case for asset sales, rather than hoping people would conclude they’re necessary after playing the choose-your-own-budget game on the Strong Choices website, a point I’ve made a few times over the last few weeks (see e.g. Brisbane Times article on asset sales). This must be all too obvious now to the Government which has received inconvenient results from the Strong Choices game, as reported by the Courier-Mail this morning:

Queenslanders would rather see taxes raised than assets sold to tackle state debt

The Treasurer, rightly, more-or-less responded that higher taxes are probably undesirable because they’d harm the State economy and hence aren’t really an option. This confirms the point I made to Steve Austin on 612 ABC Brisbane a few weeks back: Strong Choices is just a game. It’s no substitute for the real economic analysis that should be done around budget measures.

The Government needs to boot out whichever PR firm came up with the Strong Choices nonsense and bring in some serious economic advisers. It’s not too late to win the debate on asset sales, but the Government needs to start scoring points soon.

Regarding other news, on yesterday’s rather ambiguous labour force data for Queensland, Pete Faulkner has a good discussion of what the data mean (see Unspinning the QLD job numbers and Once again..strong jobs data; but QLD still lags). The Queensland economy still appears like it is struggling to recover, based on the labour market data. While employment is growing at a good pace, it isn’t growing fast enough to provide jobs for all the people now coming back into the labour market as conditions appear to be improving. Hence we’ve seen an increase in unemployment to 6.3% from 6.1% the previous month as the participation rate has risen. Finally, I’d note employers appear worried about the economic outlook, as reflected in the Pulse Business Survey results released Wednesday by CCIQ (see Pulse Survey points to downturn in business confidence).

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6 Responses to Failure of Strong Choices now obvious – missed chance to persuade on asset sales

  1. Jim says:

    Clearly the use of “real choices” has backfired as a push polling exercise.

    Interesting that the views of the community seem to be:
    1) Greater taxation of resource extractive industries and other things like gambling. I.e. tax the bads and increase the rent from non-renewable natural resources.
    2) Based on the little bit of information in the newspaper, there didn’t seem to be much preference for increasing payroll taxes or stamp duty. I.e. don’t tax the good things like employment, or make labour mobility more difficult.
    3) They still are not convinced about asset sales (possibly given the lack of compelling evidence that there is a debt emergency, or that asset sales are the only way to fix the budget?).

    The responses outlined in the newspaper seem to have a degree of logic and internal consistency about them. Perhaps the general public are just more economically literate than we gave them credit for……

    Funny that the Treasurer said on the ABC this morning that there was disagreement amongst the economists (i.e. Gene and John Quiggin) over the asset sales. I’m yet to find any economist who disagrees with a need to do the proper analysis and present it to the people before a decision is made.

    • Gene Tunny says:

      Interesting interpretation of the results, Jim. Thanks. Yes, you’re right economists agree with the need to do the proper analysis, a point I should have made this morning. Both John Quiggin and I agree on the fundamental economic principles. I just have a different view on the relative magnitudes of costs and benefits of asset sales, which in the end have to be assessed case-by-case.

  2. Katrina Drake says:

    My thoughts exactly Jim, I certainly trust the people to get it right. I certainly voted that way, increase the bad tax, decrease the good, hang on to our income producing assets, cut the waste in health, and ensure everyone has the opportunity to be self reliant.

    Far to many income producing assets are being sold to foreign investors, which means Australians also loose the income stream. We don’t want to be a nation of renters, working for foreign owners.

    • Gene Tunny says:

      Thanks for the comment, Katrina. So long as we get a fair sale price, we should be compensated for the lost income stream. The assets also remain in Australia and will continue to be productive here. I’m unconvinced foreign ownership is a good argument against privatisation.

  3. Jim says:

    It would seem that the State Government is tying to surpass the mining industry when it comes to digging holes for themselves. Some comments in the media attributed to the State Treasurer now indicate that “Strong Choices” was actually a program to educate us about the need to privatise assets and reduce debt.

    Surely what constitutes education must be based on some premise of proven fact, or at least a robust theory (religious education excluded, which is based entirely on unprovable belief systems). But we don’t know that privatisation will provide net benefits because no analysis has been presented, and the theoretical arguments are not very strong either. So how can “Strong Choices” be an education program?

    Put some real analysis in front of Queenslanders. They deserve nothing less. If privatisation stacks up. Great. Do it. If it doesn’t stack up. Don’t do it. That’s what a Government prepared to make strong choices would do.

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