Coaldrake integrity inquiry submission

Professor Peter Coaldrake appears to be doing a great job in his Review of culture and accountability in the Queensland public sector, and I’ve been impressed by his findings in his interim report regarding the politicisation of the public service, something which has been of concern for many years. I’m going to provide a submission to the inquiry, encouraging Professor Coaldrake to think about the implications of the integrity issues he’s identified for Queensland’s public financial management. A first draft of my submission is provided below and I’d welcome any comments and suggestions.

Draft submission to Coaldrake Review of culture and accountability in the Queensland public sector

Dear Professor Coaldrake

Your review has revealed some important concerns regarding culture and accountability in the Queensland public sector so far, and I would encourage you to delve deeper, particularly into what it means for public financial management. 

As a former public servant who has held various roles in the Australian Treasury and Queensland Government agencies, I have become concerned about some recent financial manoeuvres by the state government. These actions raise questions about: 

  • the integrity and reliability of the public financial accounts over the long-term as the impacts of these various fiscal manoeuvres accumulate (i.e. we may be fooled into thinking the state’s financial position is much better than it actually is, meaning governments could spend more than is desirable); and 
  • the ability of the state public service, particularly the state Treasury, to provide frank and fearless advice. 

The most egregious financial manoeuvre was the 2021 fake privatisation of the Titles Registry, which was designed to reduce Queensland’s reported net debt, but in a way that, in my view, was contrary to well-established government accounting principles. I have developed this argument in two articles on Queensland Economy Watch which I would refer you to:  

https://queenslandeconomywatch.com/2022/02/04/qld-titles-registry-trickery-should-be-investigated-in-integrity-inquiry/

https://queenslandeconomywatch.com/2022/01/17/fake-privatisation-of-titles-registry-helping-qld-govt-pretend-it-has-debt-management-plan/

Also worth investigating by your review is the Government’s current proposal to shift residential tenancy bonds being held in trust by the Residential Tenancies Authority (RTA) into the Queensland Government’s bank account. This has prompted strong criticism by the Real Estate Institute of Queensland (REIQ) and Tenants Queensland. In its 1 April 2022 submission to the Queensland Parliament’s Economics and Governance Committee REIQ observed:

The RTA currently holds close to $1 billion of rental bonds for Queensland tenants. The proposed amendments to the RTRA [Residential Tenancies and Rooming Accommodation] Act have the effect of allocating these funds to the Government’s operating bank account (and its balance sheet).  These monies belong to Queenslanders and they should remain held by the RTA ‘on trust’. 

Depending on the specific accounting treatment, this could be another tricky way to claim a reduction in net debt without actually improving the state government’s net financial worth, and hence it could lead to poorer government budget management. 

With the authority given to you by this review, you have the power and responsibility to uncover the truth about these questionable financial manoeuvres. Ultimately, integrity concerns could have real costs to taxpayers through poorer public financial management. Hence it is important that your review considers these matters.

Queensland Parliament House, corner of Alice and George Streets, Brisbane.

Please feel free to comment below. Alternatively, you can email comments, questions, suggestions, or hot tips to contact@queenslandeconomywatch.com. Also please check out my Economics Explored podcast, which has a new episode each week. 

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