jobs, economic diversity & growth - Liberal National Party

A REAL ECONOMIC PLAN

JOBS, ECONOMIC DIVERSITY & GROWTH

Contents

Leaders’ Foreword. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2 A Confident & Stronger Queensland Economy. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3 Labor’s Economic Record. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6 Labor – Is Already Costing Money and Jobs. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 7 Fall in Business Confidence . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Inexperienced and No Plan. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 “Unsustainable Finances” - Why Action was Needed. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 10 LNP = Confidence & Economic Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 15 Jobs Growth. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Commitment to Frontline Services. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 16 Funding Future Infrastructure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 17 Cost of Living. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 18 Red Tape Reduction – Economic Simplification . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 19 Budget Settings – Labor’s changes will cost Queenslanders . . . . . . . . . . . . . . . . . . . . . . . . 20 Fiscal Balance . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Credit Rating – Aiming for AAA. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 20 Gross Debt Vs Net Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Funding Long Term Liabilities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 Expenses Growth . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Tax Competitiveness. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Unforeseen Expenditure . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Importance of Regional Queensland . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 26 The Facts: Federal Funding for Queensland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 28 Unions and the Queensland Economy . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Our Commitments to Queensland. . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 30

Jobs, Economic Diversity & Growth | 1

Leaders’ Foreword

July 2015 Dear Fellow Queenslander A secure future for all Queenslanders relies on a sustainable and growing economy which creates jobs, supports a diversity of industries and is insulated as best it can be from global instability. A sustainable and growing economy doesn’t just happen. As with the careful management and experience of the Howard/Costello years, only a confident economy will grow and support the hopes, dreams and aspirations of all Queenslanders. The LNP has a plan for the Queensland economy that will deliver the security we all want now and into the future. We will focus on growing a more diverse economy which delivers jobs and looks after those less fortunate. Only with an LNP Government will Queenslanders know they have an experienced team at the helm, a team that knows what it’s doing, a team that will pay careful attention to all sectors of the Queensland economy across regional, rural and metropolitan Queensland. In Queensland, just like in other states across Australia, without strong Government finances, we can’t invest in the schools, hospitals and infrastructure which support a growing economy. When we were in Government we worked hard to put Queensland’s finances back on track and back in the black after years of neglect by Labor. Labor’s decades of unsustainable debt and deficits have left Queensland poorer and less resilient. The LNP Government reined in Labor’s $85 billion debt and we were on track to deliver the first budget surplus in 10 years. These milestones are important because they mean Government is not wasting your hard earned tax dollars. We weren’t increasing taxes and we were able to put downward pressure on the cost of living. We have already seen that Labor is back to its old ways of debt and tax increases, like raising family car registration by 3.5 per cent - well above the inflation rate. A growing economy and a confident business sector go hand in hand. Only the LNP will lower business taxes, freeing businesses to employ more people, more often. Only the LNP will keep your cost of living down and diversify the economy. Labor has no plan for our economy, no plan for jobs, no plan to grow business confidence and no plan to avoid more debt, higher interest payments and more deficits. The commitments we make in this real economic plan are for the term of the Parliament. If we are invited to form Government, should the minority Labor Government fail, these plans will be implemented. Only the LNP has a clear plan to deliver a growing economy which creates jobs and provides a financially secure future for Queensland. Yours Sincerely

Lawrence Springborg

John-Paul Langbroek

Leader of the Liberal National Party

Deputy Leader of the Liberal National Party Shadow Treasurer and Shadow Minister for the Commonwealth Games

2 | Liberal National Party | A Real Economic Plan

A Confident & Stronger Queensland Economy A strong and secure Queensland needs a growing economy which is creating jobs, sharing opportunity, diversifying its industries and building resilience to global headwinds. Economic management doesn’t just happen. Queensland can’t afford anything other than confident, experienced and careful management of the economy. Only an LNP Government would give Queenslanders an experienced team at the helm; a team that knows what it’s doing, a team which has delivered real results. It’s a team which will pay careful attention to all sectors of the Queensland economy across regional, rural and metropolitan Queensland. Queenslanders and Queensland businesses need to have confidence in their political leaders. The LNP has a clear plan if we form Government during this Parliament. It’s a plan that is pro-jobs, pro-stability, pro-growth and pro-sustainability. There will be no surprises, so business can invest with confidence and get on with the job of employing Queenslanders. An LNP Government would grow a more diverse and resilient economy by focusing on five core priority areas to diversify and strengthen the economy to insulate it from world events and commodity price downturns. The five priority areas are; a. Agriculture b. Tourism c. Resources d. Construction and Manufacturing e. Services and Knowledge Based Industries

Agriculture While most of regional and rural Queensland suffers from its second or third drought in quick succession, we have a responsibility to sustain, where practical, those who sustain us, through the production of our food and fibre. Only the LNP, with its deep roots in rural and regional Queensland, understands the potential flow on effects of prolonged droughts. The LNP is committed to enhancing agricultural production and the opportunities that a growing middle class in Asia provides. Enhancing agricultural production does not mean that the environment suffers or that we are selling off the farm. Farmers are environmentalists at heart, they need the ground they walk on to be rich and productive, as their livelihood depends on it.

Tourism With Tourism representing 70 per cent of Queensland’s services exports, our proximity to Asia and direct connections to many of our Asian neighbours, is a real and tangible benefit which should be capitalised on. With the potential to refresh our tourism offering with additional developments in Cairns, Townsville, Great Keppel Island, Brisbane and the Gold Coast, the future looks bright. We also have the opportunity to further develop our domestic tourism market including the growing Outback as a destination. The former Government brought together the Tourism industry to chart a course for success which involved greater regional autonomy and destination marketing. The DestinationQ plan should be fully implemented and supported by Government and industry. In 2013, tourist visitor nights from China were over 2.2 million up from 1.3 million in 2011.

Resources Undoubtedly, the resources industry, in particular mine expansions and the development of the CSG to LNG, has sustained many regional and rural economies over recent years. With the impact of falling oil and coal prices, the resources sector has seen falling production and some operations have become unviable. The resources industry is very cyclical; it’s this cyclical nature which is now leading to jobs losses. Given Queensland’s position in the resources cycle, Government should be doing all it can to boost investor confidence, keep costs down and expedite approvals for new developments with the appropriate environmental protections. Queensland needs to be ready for the upturn in commodity prices and demand, which will come. The LNP’s ‘Royalties for the Regions’ program also ensures continued investment back into resources communities.

Construction and Manufacturing Queensland has always had a strong construction sector; our growing population has demanded more housing with interstate and overseas investors wanting their piece of Queensland’s iconic lifestyle and opportunity. After contracting for the six years to 2012-13, the residential construction sector (as measured by Dwelling Approvals) is recovering. It’s not back to its pre GFC level but the signs are encouraging. An influx of new investors together with record low interest rates is stoking demand.


The Government needs to play its role through proper planning, land releases and by undertaking comprehensive reform of planning laws to reduce red-tape and costs and to fast track the approval process for noncontroversial developments. The last thing the construction industry needs is more red tape and higher taxes which ultimately get passed on to purchasers. Manufacturing continues to play an important role in the Queensland economy. Over the last three years the value of Queensland’s manufacturing industry has remained stable at around $18 billion, despite a range of adverse factors including; input costs, the high Australian dollar, changing consumer habits and rapid technological change. The LNP believes there is further growth potential by better supporting our value added manufacturing industry. As highlighted in the Annual Skills Priority Report, additive manufacturing is a sector for the future. Industry experts anticipate that over the next five years an increasing number of manufacturing workers will be employed in research and development and design occupations. We want to position our State for this new wave, while also supporting established manufacturing industries who want to export their product to the world.

Increasingly, manufacturing in Australia including Queensland, is moving away from heavy production lines and mass production to niche products and services based around strong intellectual property and innovation. By reducing red tape and business taxation, Queensland’s manufacturing industry can grow under an LNP Government.

Services and Knowledge Based Industries As the economies of many western nations transition towards more service and knowledge based industries, Queensland has a unique opportunity to capitalise on our proximity to Asia, our research and scientific base, advanced small manufacturers, existing service offerings and the services demanded by an ageing population as people look for anything from financial advice to home modifications. The thirst for knowledge through education and training, as workers have more than one or two careers in a life time, has led to an increased demand for quality services. Whether it’s Queensland’s world class academic institutions or local registered training organisations the education and training sector has increased access, which will further aid the Queensland economy and create jobs.

PROJECTED ANNUAL GROWTH RATES OF THE DELOITTE GROWTH 25 Residential aged care Financing the future Nextgen nuclear Nextgen solar Medical research Community care and personal services Preventative health and wellness Reskilling an aging workforce Digital delivery of health Retirement living and leisure Ocean resources Private schooling Clean coal Gas Tourism Agribusiness Disaster management and preparedness Gas transport International education Financing the Fantastic Five ICT - gateway to the future Wealth Parcel delivery Food processing Mining Projected GDP annual growth rate 2%

Potential pockets Fantastic Five Mining

3%

4%

5% Source: Deloitte


Queensland is home to some of the best services organisations assisting the mining, architectural, educational, and engineering, health and biomedical, scientific, energy and resource sectors. The services and knowledge based industries in Queensland are exportable to the world and need Government to assist them in embracing new markets. Over the last decade, the level of employment has increased significantly across Queensland. According to the Ministerial Industry Commission which publishes, the Annual Skills Priority Report, approximately 535,000 jobs have been created over the last decade. These jobs have been across a variety of sectors and are not location specific. The most significant gains were in: >> Health care and social assistance (112,000) >> Construction (75,000) >> Professional, scientific and technical services (66,000) >> Mining (55,000) >> Education and training (44,000) and >> Retail trade (37,000) The Annual Skills Priority Report also found that “Compared to Australia as a whole, Queensland’s industry structure has a higher share of activity devoted to mining, construction, and tourism related sectors such as accommodation, as well as public administration and health care.” The LNP recognises that only through diversifying the economy and building an economy focusing on five priority areas, will it be able to support the same growth as experienced across the last decade. As the private sector plays a growing role in the provision of services to an ageing population; as the Australian dollar falls and retail trade continues its upward trajectory; as education and training are decentralised from the traditional structures to more flexible and customerfriendly organisations, Queensland can be at the forefront of real economic growth and job creation. The Annual Skills Priority Report also identifies growing employment opportunities for specific industries over the next four to five years. Those industries being: >> Health care and social assistance >> Retail trade >> Education and training >> Professional, scientific and technical services >> Construction and >> Administrative and support services Deloitte Access Economics recently published a study into the 25 industry sectors which will experience the highest

growth over the next 20 years (See graph on p. 4). With experience and careful management, Queensland is uniquely placed to capitalise on the growth industries. “As Asia’s boom evolves and new domestic opportunities arise, our research shows that Australia’s growth options remain excellent,” says the co-author of Deloitte’s study, Chris Richardson from the Deloitte Access Economics division. “Our future prosperity will come from a more diversified spread of sectors, enabling Australia to remain the fastestgrowing developed Western nation in the world in the coming decade.” Only the LNP has a plan to harness these growth trends and turn them into real economic growth and jobs for Queenslanders. There are still challenges for job creation in the Queensland economy. Falling commodity prices, a drought in most parts of Queensland, an Australian dollar above historical averages and low business confidence are all challenges. These challenges make the LNP’s plan for diversifying and growing the economy all the more important. Queenslanders should be proud to have a growing State which people from around Australia and the world want to call home. With an increasing population comes increasing demand. Demand is good for growth, good for jobs and good for business. With demand also comes the need for Government to properly plan for the future. Without strong Government finances, we can’t properly plan for the future, or pay for it. Only the LNP has a clear plan to deliver a growing economy which creates jobs and provides a financially secure future for Queensland.


Labor’s Economic Record

Labor’s economic record is best summed up by the now Health Minister and former Attorney-General in the last Labor Government Cameron Dick, when he said;

Rightly, Queensland has always been a low taxing state it’s part of the LNP’s economic demand plan. We can’t be a low-taxing high-spending state. With low taxes comes the responsibility to spend accordingly. If Labor does not want to be a low taxing government, they should just tell Queenslanders and be open about it. In 2011-12, the last year of the former Labor Government, Queensland’s tax competitive advantage had fallen to just $387.

“I think Queenslanders, and I think what we misunderstood, we underestimated and we didn’t keep a focus strongly enough on debt and deficit. I think Queenslanders have a strong attachment to the AAA credit rating and also to keeping debt levels low.” 4BC Brisbane 20 July, 2013 When questioned about the size of the public service, the Health Minister said; “The reality is the community has judged on that and judged us on the economic policy settings we made.” “The reality is Queenslanders didn’t like what we did and we were judged accordingly.”

Labor’s record is unsurpassed when it comes to waste and mismanagement. It includes: >> $1.2 billion on the failed Queensland Health Payroll System >> $600 million wasted on the failed Traveston Crossing Dam >> $1.2 billion spent on the white elephant that is the Tugun Desalination Plant

612 ABC Party Games 29 June, 2012

>> $2 billion Western Corridor Recycled Water Scheme

The current Treasurer is also a supporter of Labor’s economic legacy which included huge cost of living increases, large rises in taxes and the fire-sale of assets while debt increased. The Treasurer stated;

>> $700 million blowout in the cost of the new Children’s Hospital

“In the last three [Labor] Budgets, the [Labor] government has taken significant steps across the board to fund new services. Already we have:

>> $108 million on the failed Zerogen Coal Scheme

>> $350 million spent on the Wyaralong Dam which Labor then decided not to connect to the SEQ Water Grid.

>> raised land tax and stamp duty at the top end >> increased taxes on casinos and introduced new liquor licensing fees – to help meet the costs of alcohol abuse >> increased coal royalties >> increased motor vehicle stamp duty and we have recently introduced a rise to car registration.”

>> $450 million wasted on the Northern Pipeline Interconnector 2

>> $150 million blowout in the Smart Card Drivers Licenses >> $100 million on the Australian Magnesium Corporation >> $2.2 billion blowout in the cost of building three hospitals >> $6.1 million snow ski jump into a pool

Cutis Pitt - Mythbusters Fact Sheet

>> $16 million in public funds embezzled by the Fake Tahitian Prince.

LABOR’S RECORD OF TAX INCREASES IS CLEAR 2009 -10 Increased the tax rate on gaming machines Increased motor vehicle registration – estimated to raise around $780 million Introduction of land tax surcharge – estimated to raise over $439 million

2010-11

2011-12

Introduced the waste levy –

Removed the transfer duty concession for homebuyers purchasing homes from 1 August 2011 – raised $940 million.

raised almost $290 million


Ultimately, Labor’s inability to manage money means it reaches further and further into the pockets of taxpayers through increased taxes, fees and charges, to pay for its mistakes.

>> An unsupported and misunderstood agriculture sector, without its own Department

By March 2012, Labor left Queensland with;

>> No plan to boost regional economies

>> No plan for the economy outside promoting the CSG/ LNG sector >> Skyrocketing cost of living, in particular water and electricity costs

>> A depressed and unco-ordinated Tourism sector

>> A residential construction sector which had contracted for six years in a row

>> Depressed retail trade >> A fake Tahitian Prince

>> Rising unemployment, equal highest on mainland Australia >> Soaring debt which had reached unsustainable levels

Labor – Is Already Costing Money and Jobs

>> Increased taxes and charges

After only five months in Government, Labor is already costing Queenslanders money.

>> Waiting lists for the hospital waiting lists

The recent announcement of a 3.5 per cent hike in the cost of registering the family car is sadly a return to type for Labor. This increase is more than double inflation.

>> Trains that could not run on time

How do we know there will be more? The Treasurer said so following the release of the 2014-15 Budget;

>> Dams without pipes

05 Jun 2015 “Well, the Labor Opposition will release its economic and fiscal Central Queensland News, Emerald QLD policies before the type next election. Of: 3,367 course, Section: General News • Article : News Item • Audience • Page: 7we will be dealing Printed Size: 109.00cm² • Market: QLD • Country: Australia • ASR: AUD 319 with the• Item issues this Government doesn’t want to deal with and Words: 219 ID: 416695326 that is of course revenue...”

>> No end to a decade of budget deficits

>> Queensland was the only mainland state without a AAA credit rating >> Increasing Ambulance waiting times

>> The purchase of trains with no seats >> Pipes without dams 22 May 2015 Courier Mail, Brisbane

>> Health payroll system that couldn’t pay people Author: Steven Wardill Glen Norris Jessica Marszalek • Section: General News Article type : News Item • Audience : 158,286 • Page: 1 • Printed Size: 1723.00cm² Market: QLD • Country: Australia • ASR: AUD 30,261 • Words: 645 • Item ID: 410705427

Copyright Agency licensed copy (www.copyright.com.au)

Copyright Agency licensed copy (www.copyright.com.au)

Page 1 of 6

Treasurer claims RECESSION – now he needs to find an economic plan and start paddling

UP PITT

Car rego hike ‘unfair’ on bush GREGORY MP Lachlan L hl Millar has labelled the State Government’s car registration hike “unfair” on regional and rural Queenslanders. The LNP Opposition moved a disallowance motion in Parliament on Wednesday night to try to protect families from paying twice the level of inflation for their car regos, but the motion was voted down by Labor. “Labor’s price hikes will mean registration costs for four-cylinder cars will jump from $280.05 to $289.95, excluding insurance costs, from July 1,” Mr Millar said.

CREEK

SPOOKED business leaders have demanded the Palaszczuk Government kick-start the economy instead of trashing confidence – after Treasurer Curtis Pitt claimed the state had ad nosedived into recession. Mr Pitt used Treasury figu figures g res to o claim the state dipped into a recession “we we did not have to have” during the dying days o have of the he Ne Newman ewman ew wman administration administration. Butt b business leaders disput-

ed the e recession claim claim, arguing that the Treasury figures ex excluded exports and were used for or “political political purpo purposes purposes”. p ses . Australian Industry Group Qld director Jemina Dunn pleaded with the Treasurer to g t the state ge get state’ss economy moving g by boosting confidence, confidence slash slashing g red tape and incre increasing infrastructure spending.

❝

Lachlan Millar MP:

I don’t think Queenslanders voted for massive hikes in fees. “I urged the Labor members of Parliament to consider the impact this kind of cost increase will have on people in the bush. “We are struggling through drought and the mining downturn. “Right now is not the time to slug hard-working

business people ffamilies, ili b i l and farmers and graziers.” Mr Millar said at a time when unemployment was up and families were struggling to pay bills, regional and rural people deserved better. “We don’t want to go back to the bad old days when Labor increased registration by 30% in four years,” he said. “When the LNP came into government, we worked hard to keep costs as low as possible by freezing car registration for three years. “I don’t think Queenslanders voted for massive hikes in fees.”

REPORTS P8-9

The spread between Queensland Treasury Corporation and Australian Commonwealth Government Securities 5 year bond yields 175

175

150

150

LN

PG

125

Base Points

STEVEN WARDILL

Page 1 of 1

100

ove

125

rnm

ent

100

75

75

50

50

25 0 Jan-12

25

Labor Elected Jul-12

Jan-13

Jul-13

Jan-14

Jul-14

Jan-15

0


Financial markets and Queensland’s debt holders have also cast a dark shadow over the Government’s ability to repay debt and keep debt from blowing out again.

Business confidence, or lack thereof, knows no boundaries. In March 2015, the central Queensland region recorded a result eight points (30.6 points) below Brisbane.

The graph on the previous page demonstrates that the price paid by Queensland for its debt, has increased since the election of the Labor Government. This is yet another vote of no confidence for this Government. If continued, this means the State’s annual interest bill will rise above $4.1 billion. When debt is $80 billion every basis point matters. At a time when the Reserve Bank of Australia is lowering interest rates, Queensland’s interest rate is again going up under Labor.

A recent Sensis Business Index survey of 1000 small and medium businesses, the engine room of the Queensland economy, showed a 24 point fall in business confidence, ranking Queensland second last behind South Australia.

Fall in Business Confidence Business needs confidence to invest, grow and build. As businesses employ the majority of Queenslanders, without confidence there cannot be broad based economic growth. Following the election of the LNP Government in 2012, business confidence as measured by the 12 month outlook in the CCIQ Pulse Survey of Business Conditions rose to a 10 year high.

Queensland Outlook Mar-11

Dec-11

Mar-12

Weaker

42

27

17

Same

31

42

28

Stronger

28

31

55

44.8

50.4

60.8

Index

Australian Outlook Mar-11

Dec-11

Mar-12

Weaker

31

28

32

Same

36

50

43

Stronger

33

23

25

49.5

48.1

48.0

Index

Following the election of the Palaszczuk Government in 2015, business confidence as measured by the 12 month outlook in the CCIQ Pulse Survey of Business Conditions, fell dramatically to a level below the national outlook. Businesses anticipate weaker economic growth over the next 12 months. As well as business confidence over a 12 month period being significantly weakened, the immediate general business conditions also hit a 10 year low, the largest decline in a decade. Forecasts for the June quarter also point to lower levels of economic activity. The March 2015 CCIQ Pulse Survey stated; “Businesses point to the Queensland Government’s change of policy direction and hesitation with approving major infrastructure projects as a major cause for concern.”


Sensis Chief Executive, John Allan said “respondents did not believe the new Government understood the sector and were worried about costs increasing.” Along with Sensis and CCIQ, there is also the ANZ Property Council Survey which includes the Government Performance Index. The June 2015 quarterly Government Performance Index recorded a fall of over 30 points to a negative position, the second lowest in Australia. Chris Mountford, from the Queensland Property Council said of the recent survey; “With a change in Government occurring there are obviously some concerns about what direction the new administration will take, and this has led to a fall in confidence.” To aid business confidence and create demand, an LNP Government would reduce payroll tax for small businesses by increasing the threshold where payroll tax commences by $100,000 each year for the term of the Parliament. This will assist thousands of small businesses to invest with confidence and create jobs. A growing economy and a confident business sector go hand in glove. Only the LNP would lower business taxes, allowing businesses to employ more people more often. Only the LNP would keep the cost of living down and diversify the economy.

Inexperienced and No Plan It’s clear Labor has no plan to grow a diverse economy, create jobs, or insulate the economy from global instability. They continue on the path to digging us back into the red. When the LNP Government came to office, business confidence rose as the public understood that the LNP had a clear plan to grow the economy and get Queensland back on track. The instability and inexperience of the Palaszczuk Government has shaken business confidence. This is not good for job seekers, small business owners, large businesses and people thinking of starting their own business. In May 2015, the Queensland Treasurer claimed Queensland was in a recession and then only days later revealed the economy was not in recession. It’s these types of mistakes, made through inexperience and political misadventure that damage business confidence and send mixed messages to the community. Labor has no plan for our economy, no plan for jobs, no plan to grow business confidence and no plan to avoid more debt, higher interest payments and more deficits.

CCIQ Pulse Survey March 2015 Queensland Outlook

Australian Outlook

Mar-14

Dec-14

Mar-15

Mar-14

Dec-14

Mar-15

Weaker

30

30

50

27

32

41

Same

32

37

36

35

42

42

Stronger

38

33

14

38

26

17

51.7

50.7

37.7

52.2

48.2

42.1

Index 29 May 2015 Courier Mail, B ris

General Business Conditions

bane

Author: Steven Mar-14 Dec-14 Mar-15 Audience : 158,Wardill • Section: General N ew 28 s 6 • • A P rti ag cl e: e ty28 Country: AusDecreased pe : News Item Size: 48 tralia • ASR: AU4 • Printed 38 D 2,037 • Words116.00cm² • Market: QLD : 271 • Item ID: Same 36 41413495145 38 Copyright Agen

Increased

cy licensed copy

Index

Jun-15 39 48

26

31

14

13

.com.au)

49.3

38.4

42.5

(www.copyright

44.9

Page 1 of 1

Doubt cast on Pitt’s recession claim stats

STEVEN WARDIL L

Item 15 e : News QLD t: 04 Jun 20 Article typ isbane News • 5.00cm² • Marke 6039072 Mail, Br General 74 : 41 Courier Section: • Printed Size: 388 • Item ID • r gle ge: 14 • Words: Sarah Vo Author: e : 158,286 • PaR: AUD 13,084 Audienc : Australia • AS Country

CURTIS Pitt’s re ce were based on ssion claims fig Queensland Trea ures that sury has battled to accurately forecast for at least 15 years. Analysis by Th Mail has revealed e Courierth tuations betwee e wild flucn Treasury’s gross state prod uct predictions and the Austral ian Bureau of Statistics’ final re sults. It shows Treasu growth forecast ry’s Budget s mark by more th missed the an 64 per cent on average betw ee 2014 with a m n 1999 and ix ture of bo n io ss ce ovTer heesretim athaindg and unde th r e v restie n e g the is win mat performance of r: Curt e v o the is state’RAsH ec ER om VOGLon y. SA The findings ha criticisms of th ve renewed e Treasurer’s clai Queensland ms last week that the state ex perienced a recession under the Newman government in the second half of 2014 with tw o consecutive quarters of nega tive growth. Bus

OU TH PI

t.com.au)

w.copyrigh

d copy (ww

y license

t Agenc

Copyrigh

03 Jun 2015 Courier Mail, Brisbane Section: Editorials • Article type : Editorial • Audience : 158,286 • Page: 26 Printed Size: 381.00cm² • Market: QLD • Countr y: Australia • ASR: AUD 6,691 Words: 821 • Item ID: 415453174

Copyright Agency licensed copy (www.copyright.c

om.au)

EDITORIAL

Nick Behrens sa id he was “gobsmacked” by th which underline e analysis, d the risk of using Treasury’s quarterly results to claim a re cession. “No one is disput ing that our economy is well short of where it needs to be bu t we recession, yet,’’ he are not in a said “That in our vi . only for the Aus ew is a call tralian Bureau of Statistics to m ake.” Page 1

of 2

Forget the sideshows and focus on securing our economic future

d states an ief the other most of ” Commsec ch ed tics back territories, Craig James said. tis sta S AB for st Pitt said ry’s figures. economi r this is a turn a Queens“Whethe ains to be seen.” up Treasu figures showed h vernment, nd r rem Marc Trend Labor Go te Final Dema the bette ne in the nt, but ive A IS ther decli ce land’s Sta ned to posit r LY fur pe AL t nt ur of 0.7 (PITT) REN, LIKE HE has ret ording 0.1 per ce quarter, d this reflected tha ms growth rec lly adjusted ter ” Mr Pitt sai MAGICIA IN THE economy na 15, in seaso arter 20 nd is an lly SHOWED G WEEK arch Qu “Queensla n” and “seasona IN in the M d the House. ns for LAST SITTl Langbroek in transitio ures for Quee Mr Pitt tolis good news fig 0.9 John-Pau y adjusted a om “This ing d follow the Destate econ lan the ns ee ow in Qu land sh the corner”. decline the er g per cent arter under of is turnin Opposition Lead iqu – in recember another decline ek rid Deputy LAND d ery mber l Langbro teLNP an QUEENS e week, in recov the Septe ain John-Pau Pitt over his sta in nt the ce on ag r r the to – 1.7 pe cession culed M d defended according last year an Quarter LNP.” the next, surer. s record. ments nt’ me ed se rn ea ov ro the ve repr under state Tr Pitt yesterday said im ption former go d we were in a d Mr Pitt Curtis t to defen “He sai y he says we are consum ve Parliamen month the lly Toda household ueenslanders ha lt in State cession. any more, he rea in “Q ration las ion owed showed e that the Pa t in one his decla slid into a recess t sh no he e ge an d. ian, lik confidenc vernment will state had former Newm is a magic ting week,” he sai ”. Go aszczuk last sit under thent. wing againder the gro of d s ndation Queenslant had come un d governme with the nomic fou Mr Pit th business an “The eco Armed g.” on an str ali ed are bo Austr ckour state onomists warn refire from easurer Joe Ho latest Statistics Tr But ec onomy was far Federal Bureau of Pitt told the s ec r s Queens the state’ essive. lease, M new figures con- – his claim es showed nomy s ey over ur m impr eco fig d fro ry lan . su House the recession claim ans ee land Trea nt into recession “The Qu it’s worse than firmed his g the last parli o we him of and rin the state is weak ey accused made du sittings – but als e Mr Hock and clumsiness pictur r mentary xperience a positive ts. But M ine en ed tem int pa sta ward. over his laszczuk going for the Pa “Under

AFTER 23 years of unbroken economic growth, the time is overdue for Australia to start making its own luck. Quite simply, if we do not put economic expansion and jobs first and foremost we face the very real prospect of rising unemployment, flagging growth and declining living standards. This will see depressed tax receipts for years to come which will feed through to less services, tightened welfare and ballooning deficits. We have had it so good for so long that as a nation we have become complacent. An entire generation of working Australians have spent their adult lives never knowing what a real recession looks like, while we surfed on the economic reforms of the HawkeJobs, Keating and Howard-Costello era followed by a resources boom. The party is

associated with rising prices, table because it is se particularly in Sydney. The language difficult. was more muted than Treasury The same holds t Secretary John Fraser’s earlier warning While Treasurer of an “unequivocal” housing bubble but have the same policy it is further notice that the current federal counterpart equation is unsustainable. bears much of the w Business investment, the bank said, to setting a clear pol was likely to remain weak, and overall confidence and inves “the economy is likely to be operating golden opportunity t with a degree of spare capacity for some Labor has largely time yet”. politics of its first few It is a gloomy prognosis, and one polls indicating that that will not be solved simply by responded positively trimming the sails of the ship of state. Annastacia Palaszczu The Abbott Government is confrontational style beginning to realise this, bringing down her predecessor. a Budget that recognises debt, deficit Certainly Ms Pala and surplus are Diversity Economic &e an Growth display | 9 ed strong tools to manag lead economy, rather than an end in comes to the day-to-d themselves. That said, a less Government, her han

“Unsustainable Finances” Why Action was Needed The economic decisions and plans put in place by the previous LNP Government were to grow the Queensland economy, create jobs and provide opportunities for all Queenslanders from Currumbin to Cape York, from Winton to Warwick. Queensland is set to lead the country as economic growth reaches 5.75 per cent in 2015-16 thanks to the LNP Government.

The financial decisions taken by the previous LNP Government were not taken lightly. They were taken after receiving the best possible advice from numerous experts and with a clear view to getting Queensland back on track, as was our promise at the 2012 State election. The independent evidence that Queensland’s financial position was unstainable is irrefutable.

Without strong financial foundations we couldn’t invest in Furthermore, the Labor Government’s last economic the schools, hospitals and infrastructure needed to support document, an official Treasury document, had debt rising a growing economy. This meant hard decisions were Report - Overview and Analysis Outcomes to $85 billion in 2014-15. This meant the State’s interest bill needed to correct Labor’s debt and deficit. would have been $570,000 per hour, $13.6 million per day Overview On coming to Government, the LNP inherited a budget or $95 million per week. The General Government UPF net operating balance for 2013-14 was a surplus of $619 million, compared to the 2014-15 Budget which was borrowing to pay public service wages, put estimated actual deficit of $2.298 billion. The improvement in the result was largely due tothe higher revenue (mainly from the From 2006-07, Labor Government accumulated budget fuel in police cars and buy bandages for hospitals. These Commonwealth). In addition, expenses were lower than forecast for 2013-14 in the 2014-15 Budget. deficits of $29 billion to 2011-12, with a further $13 billion borrowings together with a Government living well beyond locked in over the period from 2011-12 to 2014-15. improvement in the its means, meantThe action needed tonet beoperating taken.balance combined with lower capital purchases resulted in a General Government fiscal deficit of $2.581 billion compared to the estimated fiscal deficit of $6.083 billion.

The operating surplus in 2013-14 was due in part to the timing of transactions, such as the prepayment by the Commonwealth of $1.5 billion in Natural Disaster Relief and Recovery Arrangements funding. Without this prepayment a surplus would not have been achieved. The General Government fiscal deficit of $2.581 billion in 2013-14 remains significant. However, the result in 2013-14 is the smallest General Government fiscal deficit since 2006-07. Chart 4.1: General Government Sector fiscal deficit 2005-06 to 2013-14

4,000

2,000

$M

0

‐2,000

‐4,000

‐6,000

‐8,000 2005‐06

2006‐07

2007‐08

2008‐09

2009‐10

2010‐11

2011‐12

2012‐13

2013‐14

Source: Queensland Report on State Finances AASB 1049 Statements 2006-07 to 2013-14

The 2013-14 result reinforces how effective the Government has been in controlling expense growth, with productivity improvements allowing for the delivery of enhanced services. Expenses in 2013-14 were $198 million lower than in 2012-13. Compared to 2011-12, expenses in 2013-14 are only 0.2 % (or $87 million) greater over two years. By way of comparison, over the two year period 2009-10 to 2011-12 expenses grew by $6.4 billion. In contrast, over the decade to 2011-12 average expenses grew by 8.9 % per annum.


$

LABOR LEFT QUEENSLAND’S FINANCES

$ $

$ $ $ $“UNSUSTAINABLE”$

“The State’s debt has reached unprecedented levels. Together with its published forward estimates showing an even greater volume of debt will be required, Queensland is now in ‘uncharted waters’ with respect to the volume of debt on issue and the resultant interest bill.” INCOMING GOVERNMENT BRIEF PREPARED BY QUEENSLAND TREASURY CORPORATION, MARCH 2012

“Queensland’s fiscal position and outlook is unsustainable and restoration must be an urgent priority for this term of Government.” QUEENSLAND TREASURY – INCOMING GOVERNMENT BRIEF, MARCH 2012

“Queensland’s financial position is unsustainable. The State is currently locked into a debilitating cycle of over-expenditure, ever-increasing levels of debt, and crippling increases in debt servicing costs. A major task of fiscal repair is imperative to prevent further damage to the future prosperity of the State.” INDEPENDENT QUEENSLAND COMMISSION OF AUDIT INTERIM REPORT, JUNE 2012

“Governments have to make tough choices… We will be far better off if they make these decisions sooner rather than later. Leaving the problem to future taxpayers is deeply unfair.” JOHN DALEY, CHIEF EXECUTIVE OFFICER, GRATTAN INSTITUTE, MAY 2014

“Queensland has seen the most dramatic weakening in state finances since 2007… [Increased expenditure by] the Labor Governments in office after 1997… left the State exposed when it experienced a steep decline in revenue after 2007. It continues to struggle with a large operating deficit. The new government in 2012 has taken a much stronger approach to curbing operating expenditure and the capital program is moderating as projects are completed.” ‘STATES OF DEBT’, ROBERT CARLING, CENTRE FOR INDEPENDENT STUDIES, MARCH 2014

“Queensland’s budgetary performance is the weakest of all the Australian States.” GLOBAL CREDIT RATING AGENCY STANDARD & POOR’S RATINGS SERVICES, RESEARCH UPDATE, SEPTEMBER 2011

“The borrowing program of the State increased faster than the growth in the State revenues over the past five years, and accordingly its capacity to reduce debt is worse than five years ago.” AUDITOR GENERAL/QUEENSLAND GOVERNMENT FINANCIAL STATEMENTS REPORT TO PARLIAMENT NO. 7

“Like any organisation, (the Government) must live within its means and soundly manage the finances over the long term.” AUDITOR GENERAL/QUEENSLAND GOVERNMENT FINANCIAL STATEMENTS REPORT TO PARLIAMENT NO. 7


Up until 2006-07, Queensland’s gross debt levels were low and stable. The majority of the State’s gross debt was held by Government Owned Corporations. Gross debt in the General Government sector was small and manageable, representing around 20% of the State’s gross debt. The level of Total Government gross debt almost tripled over the period 2005-06 to 2009-10. Gross debt is currently $64 billion in 2011-12, and is expected to reach $92 billion in 2015-16. On current projections, gross debt will reach $100 billion by 2018-19. Most of this increase has occurred in the General Government sector, where gross debt has increased more than tenfold in the last five years. Independent Commission of Audit – Queensland, June 2012 Queensland Treasury and Trade

Queensland did have stable finances up until 2006-07. It’s possible to return1. to a position of stability but it requires the Overview repayment of debt and budget surpluses, not deficits.

generations left to pay the bill run up by this and past Labor governments.

The 2014-15 Mid Year Fiscal and Economic Review (MYFER) demonstrates the benefits oflost the Governmentʼs continuing When Queensland its AAA credit rating in 2009, it More recently, Queensland Treasury the projected from 2015-16was expenditure discipline, withdetailed fiscal surpluses onwards, despite further write-downs in revenue not without warning. Labor walked away from its own accumulation of debt in the General Government sector forecasts. However, the outlook for relatively modestin revenue growth, and the risks to the revenue outlook, indicate the need budget charter which described the AAA credit rating as, ongoing control of spending. December 2014 for which showed the rapid rise in General “an integral part of the Government’s commitment to Government debtProjected as represented by the blue bars on the the community”. debt levels have been revised down since the 2014-15 Budget, reflecting the tight expenditure control, and lower below table. than estimated debt levels in 2013-14. However, debt continues to increase in each year beyond 2013-14 and remains The loss of the AAA credit rating has cost Queensland substantially higher in other states. Queensland’s finances were thethan worst of all the States and approximately $419 million between 2008-09 and 2013-14. Territories in March The previous Labor Government The 2012. Governmentʼs Strongest and Smartest Choice Final Plan to reduce debtbeen anticipates proceedsrepair of $37 billion Had this it not for budget and lower global interest withoccasions the lease of certain electricity, port and water assets. The plan that $25 billion of this had been warnedassociated on many that action was rates, the proposes cost could have been asamount high be as $700 million. utilised to reduce debt, with $8.6 billion to be allocated to fund the $419 Strong million Choices Future Investment and needed and Labor ignored theState warnings. The is dead money,Program money that can’t be used $3.4 billion to fund the Strong Choices Cost of Living Fund. The Governmentʼs plan is contingentdiversify on receiving a mandate at or invest in the to build infrastructure, the economy The rapid accumulation of debt and constant the next State election. Accordingly, the budget plan has not been incorporated into the 2014-15 MYFER. latest scientific research into deadly diseases. deficits is akin to intergenerational theft, with future

2.

Budget context

As the Independent Queensland Commission of Audit found in its Interim Report in June 2012, Queenslandʼs debt levels were low and stable up until 2006-07, with the majority of the Stateʼs debt held by Government owned corporations. Between 2006-07 and 2013-14, General Government sector debt increased from $2.3 billion to $41.4 billion, as shown in Chart 1. Chart 1: Queenslandʼs debt, 2001-02 to 2017-18 90 80 70

$ billion

60 50 40 30 20 10 0

2001- 2002- 2003- 2004- 2005- 2006- 2007- 2008- 2009- 2010- 2011- 2012- 2013- 2014- 2015- 2016- 201702 03 04 05 06 07 08 09 10 11 12 13 14 15 16 17 18

General Government

Public Non-financial Corporations

Source: Queensland Report on State Finances until 2013-14. 2014-15 onwards are MYFER projections.


Doing nothing was simply not an option. It would have been negligent not to act. State governments have limited options for fiscal repair. They can raise revenue, decrease expenses or sell or lease assets. Throughout Queensland’s history, governments of different persuasions have used a mix of all three options – including the Labor government’s fire sale of assets in 2009. The LNP Government used a mix of options to bring about the action needed to restore Queensland’s finances. The task of budget reform was made harder by the continual loss of revenue due to falling commodity prices, the high Australian dollar and several natural disasters. Between 2012-13 and 2015-16 Government revenue was written down by $5.9 billion. These write downs were a lost opportunity for Queensland to invest in new infrastructure and reduce the size of budget repair measures. The largest single component of expenditure within the Queensland budget is employee expenses. The Independent Commission of Audit found that employee expenses increased by 40 per cent between 2005-06 and 2007-08. This growth resulted in public service numbers rising from 146,323 in June 2000 to 206,802 in June 2011. The decade average increase in employee expenses was 8.7 per cent per annum. These increases were simply unsustainable. Employee expenses make up nearly 50 per cent of all Government expenditure. As the former LNP Treasurer said in his first Budget Speech; “There have and will be job losses in the public sector as we go about the job of fixing the Budget. We wish this wasn’t the case. But with employee expenses making up nearly half of all Government expenditure it would be

Recurrent Expenditure

When Labor mentions the LNP Government’s reduction in the size of the public service, they won’t mention these three things: >> Employee numbers increased 40% under their government and it made up nearly 50% of all Government expenditure – which is unsustainable. >> Labor won’t re-employ those members of the public service who took a voluntary redundancy - because Labor knows the budget can’t afford it and >> There were service improvements made in Health, Education, Child Safety and many other areas as a result of improved productivity and a focus on outcomes.

disingenuous to suggest otherwise. Anyone who thinks this Government wanted to take this path is grievously mistaken. They don’t really know me … These decisions were not made lightly.” “Madam Speaker, If we had not acted now to have a rightsized public service the outcome would have been much higher taxes and charges for everyone. In fact, more increases to the cost of living. And even more job losses when the crunch finally came.”

7.

Chart 7.2 General Government recurrent expenses by type, 2010-11

MYFER 2014 -‐15 General Government Expenses

Depreciation 6%

Grants 15%

Other operating expenses 20%

Interest expenses 3%

Interest Expenses 5%

Employee expenses 46%

Grants to other sectors 25%

Source: Australian Bureau of Statistics Cat No 5512.0

Employee Expenses 44%

Deprecia3on 6%

Other opera3ng expenses 30%

Employee Expenses Deprecia3on Grants

Other opera3ng expenses Interest Expenses

This composition of recurrent expenditure is similar to that of other states.

7.2.

TRENDS IN RECURRENT EXPENDITURE

7.2.1. Total recurrent expenditure There has been a significant change in both the level and allocation of recurrent expenses in Queensland over the last 10 years. Chart 7.3 General Government recurrent expenses share of GSP 18%


The situation inherited by Labor in 2015 stands in stark contrast to that which the LNP inherited only three years earlier. Labor inherited a growing economy headed for record growth, with high levels of business confidence, a budget scheduled for its first surplus in a decade and job-creating major economic projects well advanced or approved.

An LNP Government would be committed to the principle of no forced redundancies in the public service and support natural attrition and the offering of Voluntary Early Retirements.

The fundamental reason the budget is on track to deliver a fiscal surplus in 2015-16 - the first in a decade - is because of the savings measures implemented by the LNP Government.

In 2014-15, employee expenses are $2.5 billion lower than Labor predicted in its last economic document, the 2011-12 Mid-Year Fiscal and Economic Review (MYFER).

In December 2014, Queensland Treasury detailed the impact of the LNP’s saving measures - totalling $6.902 billion over four years. Put simply, taxes, fees or charges would have had to rise by $6.9 billion if no action was taken. Such a rise in taxation would have crippled the economy, pushed the cost of living higher and meant harsher measures in the future, as the crunch would have come.

The LNP Government was also focused on finding waste and bureaucracy within the Queensland public service. For example, it stopped duplicating activities which were the responsibility of the Federal Government. It controlled expenses while raising taxes on resource companies when they sold their coal for higher prices, and raised taxes on some insurance products to pay for the NDIS.

Queensland Treasury and Trade

The Governmentʼs fiscal principles, especially achieving and maintaining a General Government sector fiscal balance, and stabilising then significantly reducing debt, have provided a clear focus and objective for policy.

The 2014-15 MYFER consolidates fiscal repair, and demonstrates that announced measures are showing results, albeit under the burden of high levels of debt. Chart 4 shows the improvement in the General Government fiscal balance over the period 2012-13 to 2015-16 attributable to fiscal repair measures implemented by the Government. Chart 4: Improvement in fiscal balance with Government measures 2 0 $1.73B

$ billion

(2) (4)

$1.87B

$2.35B

(6) (8)

$952M

(10)

2012-13 Without measures

2013-14

2014-15

2015-16

2014-15 MYFER

Source: Queensland Treasury and Trade.

Net measures since the election in March 2012 are delivering savings of around $6.9 billion in the General Government

sector over the period 2012-13 to 2015-16. These measures, in combination with ongoing expenditure control, have resulted in Non-financial Public sector (NFPS) borrowings at 30 June 2016 being projected to be $11.6 billion lower than the comparable estimate in the Independent Commission of Auditʼs Interim Report, as shown in Table 1. Table 1: Non-financial Public sector – revisions to gross borrowings 2013-14 $ million CoA Interim Report 2014-15 Budget 2014-15 MYFER

1

2

Reduction since CoA


2014-15 $ million

2015-16 $ million

82,293

86,326

89,838

76,123

79,956

80,619

72,716

77,553

78,241

9,577

8,773

11,597

Notes: 1. Independent Commission of Audit (CoA) Interim Report borrowing numbers have been adjusted to ensure comparability with the 2014-15 Budget and

LNP = Confidence & Economic Growth Any movement away from achieving a fiscal surplus in 2015-16 will mean higher taxes and charges, increases to the cost of living and more debt and deficit.

Case Study: Retail Turnover – Seasonally Adjusted

The Queensland economy will always be stronger under an LNP Government. Only an LNP Government has a real economic plan to grow the economy focusing on five priority areas, drive jobs growth and build resilience from global events.

In March 2012 retail turnover was $4.385 billion and in January 2015 it was $4.918 billion, which means that during the term of the LNP Government, retail turnover increased by more than $530 million, an increase of 12.2%. During March 2009 to January 2012, retail turnover only increased from $4.135 billion to $4.318 billion or $183.9 million. Under the LNP retail turnover grew at almost three times the rate it did under the last Labor Government.

The LNP Government took a plan to build a four pillar economy to the last election. That plan was implemented from day one. Providing confidence and growing the economy doesn’t just happen. It takes courage to make tough decisions, it takes skill to implement service delivery enhancements and it takes experience to know what will and won’t make a difference to real economic growth. The Queensland economy grew at an average of 2.63 per cent, (includes 2014-15 Treasury estimate) over the three years of the LNP Government. The Queensland economy will strengthen to 5.75 per cent growth in 2015-16. This compares to 2.5 per cent nationally and 2.2 per cent in NSW and 2.0 per cent in Victoria over the same three year period. Under the LNP Government and because of the confidence, stability and growth friendly policies it espoused, the Queensland economy was on the cusp of strong growth; >> Dwelling approvals for the 12 months to March 2015 were 14.9 per cent higher than the previous 12 months >> Dwelling approvals are flowing into residential construction activity with the number of private dwellings under construction growing by 30.1 per cent over the year to the December quarter 2014

Industry; % of total Gross Value Added

>> Housing finance for owner occupiers growing by almost $6 billion between 2012-12 and 2013-14 >> Queensland had the highest business confidence in the country in September 2014, according to the National Australia Bank quarterly business survey >> Retail trade in Queensland increased for six consecutive months up to January 2015 >> The total value of merchandise exported from Queensland in the 12 months to March 2015 topped $45.2 billion >> Education-related travel exports from Queensland have increased by 8.6 per cent. More than 64,000 international students currently call Queensland home >> Economic growth is forecast to average 4.25 per cent over the next three years.

June 2012

Year End ($ billion; % of total GVA) June 2013

June 2014

Agriculture, Forestry and Fishing

7.89

7.60

6.91

% of total gross value added

2.99%

2.80%

2.49%

Mining

22.93

25.17

27.35


8.71%

9.28%

9.87%

Construction

26.75

27.34

28.86


10.16%

10.08%

10.41%

Tourism

19.54

20.42

20.00


7.42%

7.53%

7.22%

Source: Compiled by the Queensland Parliamentary Library with figures from the Australian Bureau of Statistics and Tourism Research Australia.


The LNP’s four pillar strategy was never designed to cover the entire economy but injected a much needed drive and focus into four major industries which represent different areas of Queensland but benefit all Queenslanders.

seasonally adjusted terms) when comparing March 2012 and January 2015.

Percentage change in unemployment

Given the drive and focus achieved across the four pillars, the LNP has added another priority area; Services and Knowledge Based Industries. This recognises the further need to diversify the Queensland economy, to provide jobs now and into the future.

State

Mar-12 Rate Jan-15 Rate Change

NSW

4.7

SA

5.2

TAS

6.9

AUS

5.2

5.5

6.5

1.0

VIC

5.8

6.5

0.7

WA

3.9

State Avg.

5.3

QLD

Jobs Growth Queensland has more people employed now than ever before. From March 2012 to January 2015, more than 32,000 jobs were created in a challenging environment and amid budget repair. There is no doubt that Queensland’s employment market has been and remains patchy. Over the past three years, jobs growth in Queensland has at times led the nation and at other times fallen behind trend. At one stage during the last three years almost 60% of the jobs created in Australia were created in Queensland.

6.2 7.2 5.5 6.6 6.4 6.3

1.5 2.0 1.6

-0.3

1.08 1.1

Chart 8, from the 2014-15 MYFER, clearly shows unemployment in Queensland remaining below the historical average rate, while also displaying the patchy nature of employment growth.

and Trade The LNP has Queensland a plan forTreasury the Queensland economy that will The lack of diversification within the Queensland economy, deliver the security we all want now and into the future. built up over twenty years, is a particular concern. The fall 3.3high Overseas exports We will focus on growing a more diverse economy which in commodity prices and the Australian dollar have jobs andthan looks after seen large scale job lossesCoal inprices the are resources sector. Some forecast to be lower than expected at the time of thedelivers 2014-15 Budget, as weaker expected globalthose less fortunate no growth adversely affected in 2014. Prices are forecast to remain where subdued in we the near term, before recovering matter live. estimates place the number of has direct jobs lostcoalatprices more than somewhat in the medium term in line with expected improvements in global economic growth. Coal export volumes are 22,000, with the indirect impact far higher. forecast to increase at a softer pace than previously expected due, in part, to a reduction in exports to China as its

Commitment to Frontline Services

government addresses pollution concerns.

Recently released data from the Australian Bureau of metal exports are forecast to be somewhat lower than expected in the 2014-15 Budget due to the impact on output of Statistics shows the eratic Base nature of employment. The Only through a growing economy and strong finances can a lower than expected mine grades. central region of Queensland has lost 13,000 jobs with the Government confidently invest in frontline services knowing The ramp up in LNG production will drive a surge in overseas exports in 2015-16. However, the recent slump in oil prices Fitzroy region losing 3500 jobs and the Darling Downs fund the outcomes required. and delays in production have lowered expectedand LNG export values that relativeittohas Budgetthe over dollars the forecast to period. Maranoa losing 2600 jobs After – mainly due to the downturn posting a strong rebound of 13.3% in 2012-13, overseas tourist nights remained at elevated levels in 2013-14. Funding frontline services is not simply about throwing in the resources industry and drought. While the financial Overseas tourism exports are expected to grow, supported by the easing in the A$ and increasing popularity of overseas money at a problem. travel by Chinese tourists. Exports of education services sector and manufacturing sectors added moreservices are also expected to continue to pick up over the forecast period. than 26,000 jobs, together3.4 with the growth of 9000 jobs in The LNP Government has a strong track record of Labour market Cairns due to higher tourist numbers. investing in frontline services despite the State’s financial With the outcomes and forecasts of overall economic growth now below those published the 2014-15 Budget, experienced the pace of position. It isinonly through management that Australia’s overall employment has also been recoverymarket in the labour market will also be weaker than previously expected. we can reduce debt, fund front line services and achieve challenging. Some states like NSW,conditions SA and WA have seento improve in the remainder of 2014-15, although the extent of Employment are still expected to continue better outcomes for Queenslanders. improvement unlikely to be strong enough to achieve the biggest changes (increases) inisunemployment rates (in the Budget forecasts. Year-average employment growth is now expected to be around 1½% in 2014-15 and 1¾% in 2015-16.

Recent labour market data have also revealed a lower than expected labour force participation rate, although not enough to prevent the forecast year-average unemployment rate in 2014-15 and 2015-16 being higher than in the Budget. Chart 8: Queensland labour market1 8

12

6

Long-term average unemployment rate (7¼%, RHS)

5 4

9

6

3 2

Per cent

Annual percentage change

7

3

1 0 1985-86

1990-91

1995-96

Employment growth (LHS)

2000-01

2005-06

2010-11

0 2015-16

Unemployment rate (RHS)

Note: 1. 2014-15 and 2015-16 are forecasts. Source: ABS 6202.0; Queensland Treasury and Trade.


Mid Year Fiscal and Economic Review

7

In the 2014-15 Budget, Education funding increased by 7 per cent to $11.8 billion. This was in addition to a 6.6 per cent increase in the 2013-14 Budget. The Education budget is now more than $3.1 billion larger than when Labor left office because of decisions made by the LNP Government. In the 2014-15 Budget the Government committed $406 million to ensure the successful implementation of the recommendations from the Carmody inquiry into child protection. In the 2014-15 Budget, Health funding increased by 6 per cent to $13.6 billion. This was in addition to a 4.5 per cent increase in the 2013-14 Budget. The Health budget is now more than $2 billion larger than when Labor left office because of decisions made by the LNP Government. The LNP’s actions to re-vitalise frontline Health services also resulted in: >> Q ueensland’s emergency department presentations completed within 4 hours improved to 75 per cent in 2013 from 63 per cent in 2011 >> A mbulance response times improved by 66 seconds from 2012 to 2014 >> Complete eradication of the dental long waiting list >> R eduction of surgical long wait patients from 6,400 to 73 just prior to the election. The LNP’s actions to re-vitalise frontline service also resulted in: >> t he number of trains running on-time increasing from 85 per cent in 2012 to 96 per cent in 2014 >> s ocial housing waiting list applications falling by 36 per cent from March 2012 to March 2014 >> I ncreasing the number of police on the beat. As at 31 May 2014, police officer numbers had increased by 833, as part of a commitment to 1100 new officers >> A n extra 761 new Teachers and Teacher Aides in classrooms across the state >> C ommencement of the Great Teachers = Great Results Program >> Introduction of Independent Public Schools >> C rime rates are down across the board – the overall rate of total crime reported a 2 per cent decrease between 2012-13 and 2013-14 >> 1000 more rail services a week. The LNP’s record clearly demonstrates what is possible if a Government shows a strong commitment to financial discipline, efficiency and achieving value for money, while maintaining a focus on delivering real outcomes for Queenslanders. The achievements in frontline service delivery across a range of Government departments owe their success to the ability to collaboratively and innovatively partner with the private sector. Governments that believe they have all the answers to every problem waste vast amounts of taxpayer’s funds making solutions that the private sector has readily available.

A change of mindset is required to ensure value for money and the best possible outcomes are achieved. For example, the LNP Government was able to clear the dental long wait patient list by partnering with private providers. An LNP Government would continue to look for innovative ways to work with the private sector to deliver outcomes for Queenslanders. Innovative public private partnerships are not just limited to infrastructure. Emerging approaches, combining private, public and not for profit sectors, aim to tackle social challenges through social benefit bonds or similar reinvestment schemes. These trends should be harnessed to ensure Queensland is at the cutting edge of service delivery, providing the best possible service to customers while ensuring value for money outcomes are achieved.

Funding Future Infrastructure

With a growing state comes a growing need for infrastructure. This is a good problem to have if managed properly and if debt levels are low. Given Queensland’s significant debt challenge, alternative ways of funding vital infrastructure need to be explored. As part of the previous Government’s proposed (not accepted) Strong Choices program, there was $8.6 billion earmarked for new infrastructure investment right across Queensland. With this option no longer being considered, infrastructure has to be funded from free cash flows or in partnership with the private sector. The LNP Government successfully funded the below list of infrastructure projects through public private funding arrangements, when they could be afforded by the budget; >> $ 1.6 billion Toowoomba Second Range Crossing - a major piece of economic infrastructure >> H erston Quarter redevelopment, to ensure the proper use of the old Royal Children’s Hospital site >> 1 William Street, the catalyst for the ($6-7 billion) Queens Wharf Development at no cost to the taxpayer >> T he $457.3 million Government Wireless Network, providing our emergency service personnel with the most secure and up to date communications tools >> $ 4.4 billion New Generation Rollingstock train cars to replace ageing rollingstock and prepare for patronage increases. >> $ 1.38 billion Queensland Schools Project, delivering 10 new schools in SEQ for over 10,000 students, 500 teachers and 130 non-teaching staff, with 25 years of professional maintenance included. An LNP Government would retain Projects Queensland as a stand-alone unit within Queensland Treasury. It is vital, given the State’s constrained finances, that a dedicated team of professionals seek out opportunities for the private sector to fund the provision of new infrastructure right across Queensland. An LNP Government would also use free cash from budget surpluses to invest in new infrastructure, where the private sector can’t fund a project or where private investment does not represent best value for money.


Cost of Living

Over the latter part of the last decade the cost of living increased beyond real wage growth with many people across Queensland under pressure when paying for everyday items like electricity and water. Queensland Labor Governments between 2004 and 2012, made a range of decisions with far reaching impacts when it comes to the cost of living. Even today, decisions made in 2009 by the Labor Government are increasing the prices paid for electricity and water. The most far reaching of these Labor decisions were: >> The double digit public transport price increases and >> The removal of the 9.2 cents per litre petrol subsidy >> The increase in bulk water prices for households in SEQ >> The change in electricity infrastructure standards >> The blowout in the solar rebate scheme >> The unfunded roll out of smart card drivers licences. All of these decisions have increased the cost of living for Queenslanders. These decisions were made by inexperienced Labor Governments, who at best did not fully understand or at worst negligently oversaw these policy decisions and their implementation. When the LNP formed Government in March 2012, it did what it promised - reduced the cost of living by up to $330; >> A freeze on Tariff 11 electricity at a cost of $63 million >> A halving of the scheduled public transport fare increase, saving an average user up to $300 per year >> A one-off water rebate in 2012-13 saving $80 per household in SEQ at a cost of $92 million >> T he removal of Labor’s tax on the family home saving Queenslanders up to $7,175 when buying a house

The LNP Government also undertook a number of other cost of living measures which included: >> R educing public transport fares by 5 per cent, the first ever state-wide reduction >> Doubling the Patient Travel Subsidy Scheme >> D oubling the Home Energy Emergency Assistance Scheme >> P roviding vouchers of up to $150 to help pay for sports registration fees >> B oosting the Great Start Grant for first home buyers of a new or off the plan property >> I ncreasing the electricity rebate scheme for eligible concession card holders >> P roviding a 20 per cent (up to a $200 maximum) subsidy to lessen the impact of local Government rates >> P roviding eligible concession card holders with a $68 per year rebate for natural gas. Throughout each year of the previous LNP Government, it implemented concessions across the Queensland community at a cost of $5 billion per year. These concessions lowered the cost of living as well as the cost of doing business across the state. An LNP Government would ensure a Cost of Living impact statement would be included in all Cabinet decisions. This would ensure all implications of these decisions on cost of living, such as fees and charges, are known and taken into account. Where a decision is taken and then implemented, the Cost of Living impact statement would be released as part of the normal proactive cabinet releases.

>> A three year freeze on car registration fees saving $85 at a cost of $132.3 million.

LNP track record on easing cost of living Commitment Freezing or lowering the standard domestic electricity tariff (Tariff 11) from 1 July 2012 Reducing the cost of water for families (SEQ only) Freezing family car registration for the first term of an LNP Government Halving the next two scheduled increases in public transport fares and implementing a new weekly nine trip cap on Go Cards (SEQ only) Abolishing the waste levy from 1 July 2012 Reintroducing stamp duty concessions for the principal place of residence Total


2012-13 Saving ($ per household)

120.00 80.00 7.59 18.87

113.50 $339.96

Red Tape Reduction – Economic Simplification An economy needs some level of regulation but too many rules increase costs, stifle growth and prevent investment.

“CCIQ applauds the LNP State Government on this initiative (Red Tape Reduction). The State Government has again proven itself committed to this vital pillar of economic reform.”

The LNP has a strong track record of simplifying the economy and removing red tape while retaining important sustainability and environmental protections. The LNP Government had a 20 per cent red tape reduction target over six years. Our record in Government is clear and measurable. In just three years, we were more than halfway to our 20 per cent target of $569 million worth of reform. In November 2014, Queensland Treasury assessed the impact of red tape reduction measures for businesses and the community at $425 million per year. Not only does economic simplification and red tape reduction save business and community organisations money, but it also saves valuable time. Time that can be better spent growing a business, employing others, enjoying family time and or volunteering in the community. An LNP Government would form a Red Tape and Simplification Cabinet Committee, comprising the Treasurer, Small Business Minister, Minister for Energy and Water, Minister for Agriculture, Minister for Communities & Minister for Natural Resources. The committee would be tasked with reporting to Parliament every six months on measures taken or to be undertaken to simplify government consumer interactions and reduce red tape.

Chamber of Commerce and Industry Queensland, 5 September 2014 Particular areas of focus will be: >> Rules and regulations around business creation and start ups >> The cost of living >> Promoting economic diversity >> Enhancing confidence in the economy and fostering job creation >> Ensuring economic parity between regional and metropolitan areas of Queensland and >> All Government customer service points. The LNP’s commitment to red tape reduction and simplification of Government consumer services aims to make it easier to do business, invest with confidence to create jobs and decrease the complexity of dealing with Government departments.

Red Tape Reduction LNP GOVERNMENT’S MAJOR ACHIEVEMENTS

SAVINGS

Waste Tax repealed meaning cheaper waste disposal

$88 million

Removed the mandatory requirement for rain water tanks

$60 million

Removed restrictions on choice of hot water system

$3.1 million

Removed car registration stickers

$44 million

Overhauled planning and development

$30 million

Simplified plumbing regulations

$18 million

Removed the sustainability declarations on property sales

$1 million


Budget Settings – Labor’s changes will cost Queenslanders Fiscal Balance The current budget settings are clear and unambiguous. They are designed to ensure that after a decade of debt and deficit left by Labor, the budget will return to a real surplus. By achieving a real surplus, a fiscal surplus, the Government will have the funds available to invest in education, health, jobs, diversifying the economy and looking after those in need. The use of the fiscal balance rather than an operating surplus is necessary to stabilise Queensland’s debt problem and was recommended by both Queensland Treasury and the Independent Commission of Audit. Looking back we see various Labor Governments of the 1980s and 1990s using a similar framework called the “fiscal trilogy”. Any change to the current surplus/deficit measure will weaken Queensland’s finances, lead to large increases in debt, put pressure on the cost of living and force Government to raise taxes. Queensland simply can’t afford to borrow money to pay public service wages, put fuel in police cars and buy bandages for hospitals, as it had been since 2005-06.

“The achievement of an operating surplus in itself is not sufficient for Government to attain fiscal sustainability or maintain or improve its credit rating given the impact of capital investment on the debt position.” Queensland Treasury, Treasury Reform Blueprint, Incoming Government Brief, March 2012

Credit Rating – Aiming for AAA Any relaxation of the drive to create and maintain a fiscal surplus each and every year will place further pressure on Queensland’s already precariously positioned credit rating. If Queensland loses its current credit rating, the interest bill on the State’s debt will increase by millions of dollars a day. Before any other bill is paid, a Government must pay its interest bill. That leaves less money for education, health, tourism, infrastructure and regional development projects.

Why a Fiscal Balance is more appropriate than an Operating Surplus? A fiscal balance takes into account revenue, expenses and capital purchases; it’s a broad measure that captures all government spending. An operating surplus is too constricted and does not arrest the growth in debt. As an example: >> In 2008-09 the former Labor Government posted an operating surplus of $35 million, however debt that year increased by almost $4 billion >> In 2009-10 there was an operating deficit of $56 million, and an increase in debt that year of $5.6 billion >> In 2010-11 there was an operating deficit of $1.5 billion and an increase in debt of more than $9 billion and >> In 2011-12 there was a deficit of $233 million and an increase in debt of $4.4 billion A positive fiscal balance means there are funds available for debt reduction or investment. A negative fiscal balance means Queensland goes cap in hand to banks around the world and Australia seeking loans.


“This reduction in debt cannot be done by adjustments to the State operating statement. To illustrate, if the Government were to achieve a consistent fiscal surplus of 1% of revenue year after year, it would take 50 years to reduce debt by $25 billion.” Independent Queensland Commission of Audit final report, February 2013

Any proposal to shift debt from the General Government sector to the Public Non-Financial Corporations (Government Owned Corporations) sector will not solve Queensland’s debt problem. It will simply be retained within gross debt. However, and more importantly, the increase of debt in the Government Owned Corporations sector would result in lower returns for the corporations, meaning less revenue for the budget and higher prices for consumers as the corporations charge customers more to repay their larger loans.

In the 2012 Treasury Incoming Government brief, it stated; Queensland’s interest bill is already more than $4 billion each and every year. That’s dead money being paid to 4 bankers here and overseas. Debt remains Queensland’s problem and it will continue into the future unless reductions are made. There is no economist or recognised economic authority who believes Queensland can grow its way out of its debt problem. The waste and mismanagement of the Beattie and Bligh years, when Anastasia Palaszczuk and Curtis Pitt were both Ministers, resulted in debt rapidly rising, the cost of living skyrocketing and, not surprisingly, increases in taxes and charges. Because Labor left Queensland with almost $80 billion of debt, borrowing now to fund infrastructure does not make sense, even though global and domestic interest rates are at all time lows. Unfortunately, for this generation and the next, Labor went on a wasteful spending spree and ran up the State credit card. Now we have to pay for it, in both dollar terms and in terms of missed opportunities. An LNP Government would manage the Government’s borrowings to minimise any increases over the term of Government and use surplus funds to pay down debt and invest in infrastructure.

“Gearing is relatively higher in the GOC sector, indicative of the more commercial approach with most GOCs’ Balance Sheet targeted to sit in the BBB credit rating range on a stand alone basis but also indicative of the capital-intensive nature of the businesses. It is not possible for GOC gearing to continue to rise without endangering the stand alone credit ratings of the GOCs, which are generally targeted in the BBB (investment grade) range. In approving large projects, the Government should be aware that these projects are likely to require “equity injections” from the budget in order maintain these gearing ratios. The only way for the budget to fund equity injections is through borrowings. For this reason, at the total State level, major new GOC projects that get approved will likely be funded entirely from borrowings.”


Credit Agencies’ Commentary ALP over 2009-2012

Standard and Poor’s (S&P)

Moody’s

LNP over 2012 - 2015

“Queensland’s budgetary performance is the weakest of all Australian states. We expect that the large increase in Queensland’s debtfunded capital expenditure to lead to a much greater increase in its net financial liabilities as a proportion of operating revenue. Accordingly, Queensland’s whole-of-government net financial liability levels, as a proportion of operating revenue, is likely to exceed all states including New South Wales, and similarly rated Tasmania.”

“The stable outlook reflects our view that the state will largely adhere to its fiscal strategy and that in its forecast years, operating surpluses will sustain its budgetary performance while its debt burden levels are expected to stabilize and gradually decline.” “We view the state’s revenue and expenditure management to be strong.”

“The state’s debt burden has risen rapidly in recent years and is expected to continue to rise, reflecting the persistence of large deficits since 2008/09.” “The ongoing deterioration in the state’s financial performance--that has occurred as elevated levels of spending on services and infrastructure outpace revenues-- is a credit concern.”

“The state has successfully held growth in current expenditures to much lower levels in recent years --0.2% in 2012/13 and an estimated 2.2% in 2013/14 -- which bodes well for achieving the 3.3% average targeted for the budget over the next four years. This latter figure compares to the 8.7% annual average for the four years through 2011/12, and is a positive indication of the government’s commitment to fiscal redress.”

Chart 7.2 GOC Gearing Ratio vs Non-GOC Gearing Ratio

Gearing is relatively higher in the GOC sector, indicative of the more commercial approach with most GOCs’ Balance Sheet targeted to sit in the BBB credit rating range on a stand-alone basis but

The above chart demonstrates that theofGOC gearing ratios they are geared at their currently targeted BBB+/A standalso indicative the capital-intensive nature of the businesses. are already above 50 per cent. alone ratings ranges. Nevertheless, their resultant liabilities to revenue ratios are high, and act to drive up the NFP sector The Treasury brief also goes onnottopossible state that; It is for GOC gearing to continue to rise without endangering the stand alone credit ratio – a key metric for the Standard and Poors ratings of the GOCs, which are generally targeted in the BBB (investment grade) range. In “Ergon, Energex and Powerlink have revenue bases that are ratings agency.” approving large projects, the Government should be aware that these projects are likely to require highly stable and largely locked in through regulation, and “equity injections” from the budget in order maintain these gearing ratios. The only way for the budget to fund equity injections is through borrowings.

For this reason, at the total State level,

major new GOC projects that get approved will likely be funded entirely from borrowings.


The LNP Government worked hard to decrease the State’s borrowing costs. Any departure from the strong expenditure management of the LNP Government will force the credit ratings agencies to reassess Queensland’s credit rating.

Gross Debt Vs Net Debt All State Governments across Australia have borrowed money and retain debt. Queensland leads the way with more debt per person quantify than any other state. A State is liable for all its debt, not just selected parts. Queensland’s gross debt (or total borrowings) will reach $79.8 billion by 2017-2018. This is $5 billion less and three years later than Labor predicted when they were last in Government because of the LNP’s hard work. The Labor Government’s preference for net debt and the use of an operating surplus are the very same measures that they were using when they racked up $80 billion in debt. These preferences did not help Queensland in the past and they will not help Queensland in the future.

Ratings Agency

Rating

Standard and Poor’s (S&P)

AA+ Stable Outlook

Moody’s

Aa1 Negative Outlook

Non-financial Public Sector Balance Sheet Components, 2014-15 State Budget Government Borrowings

$80 billion

Employee Entitlements including superannuation liabilities

$30 billion

Net Debt $42 billion

Cash and Investments including assets for superannuation

$38 billion Net debt includes assets held for employee entitlements (superannuation) but does not include the liabilities attached to the entitlements

Funding Long Term Liabilities One of the most significant achievements for Queensland has been the establishment of the independent Queensland Investment Corporation as a vehicle to fund the State’s long term liabilities. An LNP Government would continue the long standing bi-partisan support for fully funding the State’s long term liabilities.

The fundamental problem with using net debt as a measure is that it takes into account the assets held by the State. In the case of Queensland, those assets are held for the superannuation entitlements of past and current public servants. Crucially, the net debt calculation does not take into account the corresponding liabilities associated with the asset. The net debt measure is clearly unbalanced and provides a misleading picture of the State’s financial position. The net debt measure assumes that the superannuation assets of hard working past and present public servants can be used to offset gross debt. This is simply not true. The rating agencies, which play the key role in determining how much interest is paid on Government debt, focus on the level of borrowings (not net debt) as a proportion of revenue and judge governments accordingly. For example, banks don’t allow people, companies or governments to repay their loans based on their net position. Net Debt assumes that a person, company or Government can use their assets to repay debt. Queensland’s debt problems are long- term, meaning only a focus on Gross Debt is acceptable if future generations are to be given the same opportunities that this generation has enjoyed. By not focusing on Gross Debt, debt will increase, deficits will increase and interest payments will increase. Taxes will have to rise or services be reduced to pay for the increase in debt and resultant interest bill.

You can’t go to your bank and say that you’ll pay your interest on your Net Debt position – a bank simply won’t allow it. Even if the asset value of your house increases the bank doesn’t lower your interest bill on the mortgage. They still expect full payment.


Expenses Growth A hallmark of the previous LNP Government was its control of expenses, while also providing additional funding for education, child safety, health and vital infrastructure projects. The LNP slowed Labor’s runaway growth in expenses. From 2012-13 to 2013-14 expenses growth was 0.1 per cent. The LNP Government was able to balance new spending and expenses restraint, for example the Child Safety budget increased by $130 million or 17.8 per cent and the Police budget increased by $181 million or 10 per cent between 2012-13 and 2014-15, while expenses growth was restrained.

Taxation is a disincentive to job creation, investment, growth and opportunity. For decades, Queensland has benefited from being a low taxing State. This enduring economic characteristic has driven demand in Queensland and from interstate. This advantage over other states must not be whittled away. If the gap between Queensland and the other States reduces, the people of Queensland will eventually lose out as they pay higher taxes or demand for Queensland weakens. Taxation per capita in Queensland is $539 lower than the average for other states and territories. In 2011-12, the last year of the former Labor Government, this advantage had fallen to just $387. Queenslanders are now $152 better off per person thanks to the hard work of the LNP Government.

Looking forward, expenses growth is forecast to be 3.7 per cent. Expenses growth beyond that level would put The driver of the debt increases has been the accumulation of fiscal deficits, as shown in Chart 2. increased pressure on taxes, see debt rise and confine Only an LNP Government would keep taxation competitive Queensland toChart further budget deficits. 2: General Government fiscal balance by lowering payroll tax and actively limiting the growth in 1 Government expenses. More interstate migration = more Labor had average expenses growth of 8.9 per cent for the growth and more jobs. decade to 2011-12.This clearly demonstrates that Labor 0 can’t manage money. (1) $ billion

Importantly, outcomes were the basis for new funding (2) along with proven productivity gains, which resulted in (3) the delivery of increased frontline services. (4)

Tax Competitiveness (5)

Historically, Queensland has been a low tax state which (6) produced the benefit of strong migration from the southern (7) states fuelling economic growth, demand and consumption.

Unforeseen Expenditure

Accountability for taxpayers’ funds is critical. The LNP Government has an open and proud history of introducing into Parliament a Supplementary Appropriation Bill as soon as possible after the end of each financial year. The purpose of the Supplementary Appropriation Bill is to disclose any unforeseen expenditure the Government has authorised since the budget year in question.

This stands in stark contrast to the previous Labor (8) One of our prized advantages over other states is 2014-15 2006-07strategic 2008-09 2010-11 2012-13 2016-17 Government which once took as long as eighteen months our low tax regime. We can’t be a low taxing, high spending to introduce a Supplementary Appropriation Bill. The Bill Source: Queensland Report on State Finances until 2013-14. 2014-15 onwards are MYFER projections. state - the maths just don’t add up. tried to hide billions in unforeseen Labor expenditure. In response to the rapid deterioration in Queenslandʼs debt and deficit position, the Government implemented a new fiscal strategy in the 2012-13 Budget and has undertaken significant fiscal repair measures. These measures totalled $7.8 billion over the 2012-13 to 2015-16 period ($6.9 billion since the Government came to power, including those in the 2014-15 MYFER). As a result of these measures, and associated expenditure control, 2013-14 represented the smallest fiscal deficit since 2006-07. A deficit of a similar magnitude is forecast in 2014-15, with fiscal surpluses projected from 2015-16 onwards. The return to surplus in 2015-16 is projected despite reductions in key revenue sources of $5.9 billion in underlying terms, over the period 2012-13 to 2015-16, since the 2012-13 Budget. Chart 3: Average General Government expense growth Effective control of expenditure is a critical 10% element of fiscal repair, especially in an 8.9% environment of subdued revenue growth. Actual 9% expenses in the General Government sector in 2013-14 were $198 million lower than in 2012-13. While controlling expenses growth, productivity improvements have allowed for the delivery of enhanced services.

This is the first decline in expenses since accrual accounting commenced in 1998-99 and contrasts with average expenses growth of 8.9% per annum in the decade to 2011-12, as shown in Chart 3. A fall in actual employee expenses in 2013-14 of 1.7% (or $313 million) has made a major contribution to this outcome, and contrasts with average employee expenses growth of 8.6% per annum in the decade to 2011-12.

8% 7% 6% 5%

3.7%

4% 3% 2% 1% 0%

0.1% Decade to 2011-12

2012-13 and 2013-14

Source: Queensland Treasury and Trade.

2


2014-15 to 2017-18

Labor’s record on unforeseen expenditure matches its record on debt, deficits and expenses growth: >> 1999-2000 - $327.489 million >> 2000-2001 - $295.912 million >> 2001-2002 - $375.910 million >> 2002-2003 - $1.530 billion >> 2003-2004 - $2.376 billion >> 2004-2005 - $77.538 million >> 2005-2006 - $1.874 billion >> 2006-2007 - $3.990 billion >> 2007-2008 - $2.152 billion >> 2008-2009 - $2.957 billion >> 2009-2010 - $1.054 billion >> 2010-2011 - $9.305 billion >> 2011-2012 - $2.826 billion The LNP’s record on unforeseen expenditure matches its record of less debt, greater expense control and lower deficits:

>> 2012-13 - $63.445 million – lowest in 15 years >> 2013-14 - $442 million – (largely due to defined benefit superannuation payments) Together with the Report on State Finances, an LNP Government would commit to tabling and introducing a Supplementary Appropriations Bill by October each and every year. This will ensure that the people of Queensland know the true nature of the State’s finances. If the report and the Bill are prepared earlier, they will be tabled and introduced earlier. A strong economy with confident businesses and consumers is good for all Queenslanders, regardless of where they may live. The significance of a diverse economy is more important in Queensland than any other state due to our decentralised populations. What is good for Cairns is good for Queensland. What is good for Charleville is good for Queensland. No two parts of Queensland are the same and only the LNP has a plan to grow our economy, regardless of where we live and work.


Importance of Regional Queensland

Regional Queensland is vital to our future. The LNP understands the importance of regional Queensland and planned accordingly. The RegionsQ framework was developed to ensure real economic growth, diversified from a reliance on agriculture and resources in regional Queensland for decades to come. It is an important tool to ensure growth now and into the future. The framework which linked into the Government’s plans for agriculture, tourism, construction and resources, set out a clear way forward for regional Queensland to maintain and enhance its “powerhouse” status. The framework is; >> Planning for development in regional Queensland >> Infrastructure services for regional growth >> Making it easier to do business in regional Queensland >> Growing regions; capitalising on economic drivers >> Attracting and retaining people in regional Queensland >> Communicating and promoting the regions’ potential. The LNP’s commitment to regional Queensland is not solely based on tradition or representation but empathy and understanding which delivers real results; >> As at March 2014, 87 per cent of all definite projects to be delivered were in regional Queensland >> As at March 2014, 57 per cent of a new houses approved were in regional Queensland >> In 2013, 76 per cent of domestic visitor expenditure was in regional Queensland >> In 2013, 59 per cent of international visitor expenditure was in regional Queensland

>> The State’s largest public private road infrastructure project is in regional Queensland, the Toowoomba Second Range Crossing >> In the 2014-15 State Budget, 77 per cent of planned capital purchases were made in communities outside Brisbane >> $495 million Royalties for the Regions program. An LNP Government would maintain and enhance the LNP’s ‘Royalties for the Regions’ program to ensure investment in regional Queensland with a guaranteed percentage of funds quarantined to ensure a fair share of revenue is invested back into each resource area; along with an additional $10 million for the creation of a standalone fund for the preservation and promotion of heritage and historical projects. Recognising that the tyranny of distance does, sometimes, create economic disparity an LNP Government would establish a ‘Queensland Regional Finance and Insurance Corporation’ to assist rural farming and other small business enterprises that are finding it difficult to maintain viability, to invest in improved capacity, and enable these businesses to plan and deliver improved returns over the medium to long term. Learning the lessons from the development of the Bowen Basin in the 70’s and 80’s, the Galilee Basin needs to be properly co-ordinated and planned if it’s to achieve the desired long term economic benefits for all Queensland. To achieve the jobs, economic growth and exports the Galilee Basin and its proponents need stability and long term vision.

>> In 2011-12, Regional Queensland accounted for 96% of gross value of agricultural production

>> In 2012-13, 92% of exports, left from ports across regional Queensland

>> In 2013, 52% of the residential population lived outside greater Brisbane


An LNP Government would develop the Galilee Basin and establish the ‘Galilee Basin Development Commission’ to oversee the development of common user state-owned infrastructure with access provided to project proponents on commercial terms. The Parliamentary Leader of the Katter’s Australian Party would chair such a commission with its structure and governance subject to input and approval from the Integrity Commissioner.

prospect which needs proper co-ordination and long term commitment. An LNP Government stands ready to assist the Commonwealth develop a real and time specific implementation plan so both the State’s and Commonwealth’s efforts match the implementation objectives. Better co-ordination at the start will reduce bureaucracy and duplication, delivering better results for the residents of Northern Australia.

Developing Northern Queensland

Commonwealth Governments of all persuasions have provided Queensland with increased levels of funding through the normal inter-governmental mechanisms and agreements.

The LNP welcomes the Commonwealth Government’s commitment to the development of Northern Australia. The untapped potential of the north is an exciting


The Facts: Federal Funding for Queensland Over recent years, Queensland received billions in natural disaster and relief payments from the Commonwealth, far more than any other State or Territory.

>> $ 208.4 for the Cape York region package, with $48 million provided in 2015-16 >> $ 518.4 million Moreton Bay Rail Link, with $102 million in 2015-16.

The 2014-15 State Budget outlined that natural disasters cost $5.63 billion over the period from 2013-14 to 2015-16. This brings the total cost of natural disasters since 2002 to approximately $21.4 billion. The majority of this cost has been funded by the Commonwealth through the Natural Disaster - Relief and Recovery Arrangements system.

The timing of Commonwealth payments does have a significant impact on the State’s budget. The practice of pre-payment or incorrect project phasing can move large amounts of cash between years and cause the budget position to improve or worsen artificially.

Combined with significant natural disaster, relief and recovery payments the Commonwealth has also funded a number of critical projects across Queensland, namely:

The below table demonstrates the increased payments from the Commonwealth to the Queensland Government over the next four years.

>> $ 6.7 billion for the duplication of the Bruce Hwy from the Sunshine Coast to Cairns, with $500 million in 2015-16 >> $ 929.6 million for the congestion busting Gateway Motorway North upgrade with $50 million provided in 2015-16 >> U p to $1.2 billion for the critical economic enabler, the Toowoomba Second Range Crossing, with $316.65 provided in 2015-16 >> $ 508 million for the upgrade of the Warrego Highway, with $101.5 million in 2015-16

Labor tries to claim a lack of federal funding as the reason for soaring debt. The reality is Labor’s inability to manage government expenses means there will be more waste and mismanagement that Queenslanders will have to pay for with higher taxes. The Commonwealth’s recent drought package together with $5 billion in concessional loans for the development of Northern Australia is another sign of the ongoing commitment of federal governments to Queensland and our continued development.

Federal Funding - The Facts Year

Total funding to Queensland (including GST)

GST payments to Queensland

Funding to Queensland for hospitals

Funding to Queensland for schools (Total Students First funding)

2014-2015

$21.2 billion

$11.7 billion

$3.0 billion

$3.0 billion

2015-2016

$23.1 billion

$13.0 billion

$3.2 billion

$3.3 billion

2016-2017

$26.3 billion

$14.9 billion

$3.3 billion

$3.6 billion

2017-2018

$27.8 billion

$16.5 billion

$3.6 billion

$3.8 billion

2018-2019

$28.0 billion

$17.3 billion

$3.8 billion

$3.9 billion


Unions and the Queensland Economy

The LNP respects the rights of unions to lawfully organise within the Queensland economy, including the Queensland Public Service, while recognising that there is a nuanced balance between control and undue influence as opposed to organising. The LNP also recognises and respects the rights of public sector and local government workers. We believe that a stronger economy, sound financial management and a focus on creating jobs is beneficial to all Queenslanders. While we respect the role that unions play in advocating for their members, it is not the job of public sector managers to actively promote and encourage membership of public sector unions. When union encouragement provisions compromise the independence of the Queensland Public Service, the balance is not right. When union organising becomes part of the day to day operation or running of the Queensland Public Service, an apolitical collective of hard working men and women, the balance is not right. When lawless activity continues on construction sites across Queensland, threatening the jobs of thousands of workers and when hard-working mum and dad business owners are stood over or intimidated, the balance is not right. When union bosses are given the private contact details of public servants in an effort to unionise and isolate nonunion workers, the balance is not right. An individual’s right to privacy and freedom of association are important principles. An LNP Government would restore balance to Queensland’s industrial relations system by protecting the private details of public servants and private employees.

rmation Important Info

d for Queenslan ployees m Government E

e Your Workplac k. vacy Is At Ris 21 Ma Py ri 2015

The Australian, Au stralia Author: Patrick Ha nn rently aford • Se licies curGe Audience : 10s4,7 newil workplace po ction: rall be News • Article typ details New law and74 • Page : 12 an •you e : News Item Country Prirnte ment me dsSiz Au te Pa•rlia e: ut witho 221.00cm² • Marke Staalia e str ser ani AS be:for org66 R: AU s and D sse 4,4 t: National bo ion • Wo un rds: 540 • Item ID: e. provided to dg wle kno 410181952 nt or r written conse you

r privacy and a

jor attack on you

major attack t an independen

ing is a ma Copyright This vention of preserv Agency stminst Welice nseerd con on the copy (www.copy right.com.au) ice. serv lic pub tected d with r privacy is pro Right now, yous, unions cannot be routinely providepter 15

Cha law is protected in Under current ails. Your privacy ced by the your personal det ch was introdu ations Act, whi ts at work. Rel righ ial acy ustr priv Ind of the tect your ernment to pro former LNP Gov

PARTY TIME FOR UNION HACKS

vacy laws, these pri But under new go l ced wil ds uar recently introdu safeg soGovernment has

or t of The minority Lab ations Act as par the Industrial Rel Under these new amendments to ment Policies”. age our ses and Enc bos n sed to unio called “Union will be freely pas dge. sent or knowle laws, your details your written con out with ers organis

rted ed a new It’s already sta Government has already introduc ernment

or of new gov The minority Lab ory for the details makes it mandat and organisers. rule that15 d to union bosses vide 20 pro ws Item n be to Ju 03 employees le type : Ne ane

ws • Artic

ail, Brisb

ket: QLD

Courier M 3 General Ne : 285.00cm² • Mar Symptom : 41547070 Size m ID.au inted • Iteom s ofeven Wardill • Secti15on•5,: Prcty inv 2y.c est : 40 me nt. ac ords No riv doubt • Wrp Author: St : 158,286 • Page: ote the 005ou y wil D l pr e AU at nc be grateful for this died outstrmo Au Labor’s m Fin taxpayeraltryai: Ause aliare• ASR: Coun funded patronage and take an ugly form it at the next Queen will repay sland election. in Queensland The sense of Copyright

nsed copy

Agency lice

.au)

yright.com

(www.cop

structure. Page 1 o In the national the party’s chief ad organisation — 73 the 26 members ar former trade union At a parliament influence can be se 42 per cent of lower and a staggering 71 ALP senators previo held a paid positio n union. This means that, fact only 12 per cen t Australia’s voting-ag population consist so union members, 51 p federal ALP parliam e are former union off i The Queensland government’s action s merely the result of th influence.

owner the unions have ove ship that r Palaszczuk’s govern ment was highlighted last mo nth by The The use of taxpayer Courier-Mail. resources to increase union me The newspaper rep mbership is a fundamental attack Queensland secret orted the on freedom ary of association, but left-wing union Un of the it shouldn’t ited Voice, come as a surprise Ga ry Bullock, was braggi to the public. ng about the union’s According to new role s the Queensland Lab reports, election of seven sta in the or te MPs, two government has gra of whom are now in cabinet. nted unions extensive access to Bullock was quoted state as government resou referred to politician having rces — s including phones, “United Voice MP as computers, s” — which emails and office spa will surprise constit ce — to uents who “encourage” union thought they were me voting for in the state’s public mbership Labor candidates. service. This decision was Th is is a level of influence part of a secret deal between unimaginable for any other the union movement and An int ere st gro up. The spe nas Palaszczuk’s newly tacia treatment is the sym cial Patrick Hannaford elected ptom of a istoa government. much deeper, interc fellow s PittInstitu bu atrtithe r Cu onnectedter letter, Treasure te o strial rerelationship betwe donors, Aff The agreement sta indu air s an and h lis the aut e tab en th es hor the union wi msust oup mad functions government agenci tes that andvie ence w AL Leader the thcgrt,om s referfor ingand P. po ion ati Th sitis es onshiplation st take en union research p like Op gborrel ernmon unhri g. a “positive, suppor ENmu is ens up of “gov unien rinthe str inf ned WARDILL s”. luence in the Sp ce in ce did tive rol en fer at wr STEV uct re th A La e” s ic ure in of academ Labttorsaid busines same LNP have recruitment by un therty ders rty. lansts , Qu and ion N bosses appearystoto thethe Lab“ItorisPa eens But Mr Pi en Pa exi left off be UNIOs. listen to be ke t e d thr This is an outra th no s ha ou mgho ed wa co ps ut the t ou are anisat scorey org en ha usndbre begeo ional gr Governmen sector vernment, and here th wanting Goach of trust. rs par c cause the liam re ary win Palaszczuk gs with ministeand only publi ing in heent looking at lations reform. t wheth- gs. 71 meetin aboustr Rather than acting Th k s. e th tal re AL on to al P’s m tri e with uct ing tinthre Govure is set out indus ion the are dealing or not my en dinary unin -its nat public’s interest, Pain jus er ion “What we … is essentially op rm re e extraor s tfo pla t ha lasThzcz enal , er it was uk wh land nm has aft ich ns er ee es ’’ plo m Qu le, co chosen to use people in op s em yll betlines the cess ac’s to pe ps wiou no busines c sector ty’s access par principles, ployer grou le meetthere are d emdbli earned money to emvealehar said. anisat relate to pu this state sheion roundtab org at a th al of t r s str t M er en uct pow ou m r, in ure and t er a vern Howeve relations special interest gro lef con ing the Go refor industrial ess what? It is m. stitution r g wo b ome s n gfra uping. advis gu rk. The S p r ial al relation s because, industrial bosseion was In doing so, the gov on industri with union nat it rm al sa pla id tfo blic sector e are the pu con t gs ern ou t tai tin ns me es ab a Mee nt e latgge that thsta in arguably has violat d ar he said. “W ale cle s,” ve rin g 169 relation ref s nces to edhave been re ries released this ere s e n i s international treaty ministerial dia vernion ad s. b u employer.” spre isun zczuk Go obl ek tio was being the access The Palas ticised for apandns by pressuring emplo weiga rtfolio. ese ref d by cri nence shun ere ost every po ierTh ent has been too close to the yee s ran m s An ss alm to ge lro join fro ac Pa m em a union, a clear vio mereay theent ing to be statem rliament, Pr ye th The In Pa ofksuppor lation of ement, wi at the zuk sterd of the zc s z c sz u aDiversity Jobs, Economic &t to Growthpeunarion| mov 29 human right of fre me r res gra asu stacia Palas the nu mbe vealing th r n -the v eng edomnaof G onti ier-Mail re introduced a wn un ur ion do g ps Co s d ou yin ye gr sa s d pla s, association. constitto t ha busines utionalenpow en — with union Governmen uragement” policy t, giver suc roundmeetings happy co werethe Palaszczu require m been left off thhe asdvice “union en ministers .

PATRICK HANNAFORD

Unions access all areas of power

Our Commitments to Queensland

1

An LNP Government would grow a more diverse and resilient economy by focusing on five priority areas to diversify and strengthen the economy from world events and commodity price downturns. The five priority areas being; a. Agriculture

d. Construction and Manufacturing

b. Tourism

e. Services and Knowledge Based Industries.

c. Resources

An LNP Government would maintain and enhance the fiscal principles as committed to in Government, being to;

2

a. Stabilise then significantly reduce debt b. Achieve and maintain a General Government sector fiscal balance and where prudent a surplus

c. Maintain a competitive tax environment for business d. Target full funding of long term liabilities such as superannuation in accordance with actuarial advice

3

An LNP Government would better manage our debt, having prevented it from reaching $85 billion as projected by the last Labor Government and the $100 billion predicted by the Independent Commission of Audit. In Government the LNP reduced debt to below $80 billion. An LNP Government would use surpluses where appropriate to pay down debt and build infrastructure.

4

An LNP Government would be committed to the principle of no forced redundancies in the public service and support natural attrition and the offering of Voluntary Early Retirements.

5

An LNP Government would continue to work with the private sector to deliver outcomes for Queenslanders, achieve value for money and increase access to frontline services.

6

An LNP Government would reduce payroll tax for businesses by increasing the threshold where payroll tax commences by $100,000 each year for the term of the Parliament. This will assist thousands of small businesses to invest with confidence and create jobs.


7

An LNP Government would develop the Galilee Basin and establish the ‘Galilee Basin Development Commission’ to oversee the development of common user state-owned infrastructure with access provided to project proponents on commercial terms.

8

An LNP Government would assist the Commonwealth to develop a real and time specific implementation plan for the development of Northern Australia. We would also look at ways to access the Federal Government’s announced $5 billion Northern Australia Infrastructure Facility. Better co-ordination and the pooling of resources, at the commencement of development, will reduce bureaucracy and duplication, delivering better results for the residents of Northern Australia.

9

An LNP Government would maintain and enhance the LNP’s ‘Royalties for the Regions’ program to ensure investment in regional Queensland. A guaranteed percentage of funds would be quarantined to ensure a fair share of revenue is invested back into each resource area.

10

An LNP Government would restore balance to Queensland’s industrial relations system by protecting the private details of public servants and private employees.

11

An LNP Government would subject all major capital projects to needs analysis and cost benefit analysis, accepting that on some occasions policy decisions will need to be made to boost economic diversity or provide catalytic infrastructure.


12

An LNP Government would retain Projects Queensland as a stand-alone business unit of Queensland Treasury, to link infrastructure projects to private sector funds and enter into public private partnerships to address infrastructure needs and provide return on investment.

13

An LNP Government would ensure a Cost of Living impact statement would be included in all Cabinet decisions. This would ensure all implications of these decisions on cost of living, such as fees and charges, would be known and taken into account. These impact statements would be released through the normal proactive release process.

14

An LNP Government would commit to tabling and introducing a supplementary Appropriation Bill by October each and every year so that the Parliament can know the true nature of the State’s finances.


Have your say: @SpringborgMP or visit www.Springborg.com.au

Authorised by B. Henderson, 66-68 Bowen St, Spring Hill, QLD 4000.