I noticed that former Olympian Kieren Perkins has cast doubt on Queensland’s ability to host an Olympic Games and has pointed to the Queensland Government’s lack of a clear strategy to pay down debt (see today’s Courier-Mail). While the Queensland Government could probably borrow the money to pay for Olympics-related infrastructure spending, I agree that would be undesirable from the perspective of paying down Queensland’s debt and eventually restoring our AAA credit rating.
Regarding the Government’s fiscal strategy, while it did produce a high-level strategy for repaying debt before the election, it didn’t present the firm measures required to generate the multi-billion dollar surpluses it will need. As I’ve commented previously, the new Government did ask the public to take a lot on faith, as the bulk of its proposed debt reduction was occurring beyond the forward estimates – i.e. beyond the years that can be properly considered to be budgeted for – from 2018-19 onwards (see my speech on the black hole election). Now the then Opposition is now the Government, it will have to formulate budget measures that will allow it to run the multi-billion dollar surpluses it will need from 2018-19 to repay debt according to its fiscal strategy.
Hence it may be desirable for the Premier to slightly postpone the Budget, usually presented in early June, if it means the Government can give fuller consideration to budget savings measures. A good place for the Government to look for budgetary savings would be the hundreds of millions of dollars that is currently provided annually as industry assistance, and I hope the Government has received a full briefing on the progress and findings of the QCA’s industry assistance review (see my post Government should wait for QCA report before committing to new industry assistance).
Finally, on the merits of hosting the Olympics in Brisbane in 2028, hosting the Olympics would probably fail a cost-benefit analysis even if the State had massively paid down debt by then, as the experiences of past Olympic host cities, most notably Montreal and arguably Sydney, have shown. Queensland’s current fiscal situation makes the case for not going ahead with the Games bid even more compelling.