tag:theconversation.com,2011:/global/topics/queensland-budget-3812/articlesQueensland Budget – The Conversation2015-07-15T00:22:13Ztag:theconversation.com,2011:article/446572015-07-15T00:22:13Z2015-07-15T00:22:13ZReducing debt without austerity: Queensland govt strikes fair compromise<p>Since the surprising victory of the Labor party in the Queensland state election back in January 2015, public and media attention has focused on how the government would deal with the issue of debt.</p>
<p>Over the last ten years, general government debt in Queensland has increased from less than 10% of Gross State Product to <a href="http://theconversation.com/the-true-state-of-queensland-debt-36345">25%</a>.</p>
<p>It could be argued that this is not necessarily a problem and that this level of debt is still sustainable. Nevertheless, the general perception is that Queensland has a debt problem and the government should take care of it. </p>
<p>In principle, a government can reduce debt by cutting expenditure and increasing taxation and/or privatising public assets. This in turn generates a budget surplus which can then be used to pay back (some) of the debt. </p>
<p>The problem is that in so doing, the government risks depressing the economy. Given the already weak state of the <a href="http://theconversation.com/the-true-state-of-queenslands-economy-without-the-spin-35959">Queensland economy</a>, a budget that contained harsh measures of fiscal consolidation would be highly undesirable.</p>
<p>The challenge for the Queensland Treasurer Curtis Pitt was therefore to provide some budgetary stimulus to the economy (and hence avoid unnecessary austerity measures) while at the same taking a convincing step towards reducing debt.</p>
<p>The solution proposed by the previous government – asset privatisation – was obviously off the table. In the months prior to the election, the Labor party had strongly opposed Newman’s long-term lease plan and the promise not to sell public assets was one of the strong points of Palaszczuk’s campaign.</p>
<h2>Three initiatives</h2>
<p>The budget contains a debt action plan that is expected to generate a A$9.6 billion debt reduction over the current term of office, with A$3.5 billion savings in interest rate payments. </p>
<p>This would be a remarkable result if it were obtained without cutting public goods and services delivery, increasing taxes, or selling assets.</p>
<p>Three specific saving initiatives are central to the plan of the government.</p>
<p>First, investment in defined benefit employer contributions for public servants will be temporarily suspended for a period of five years. At the same time, the government assured that workers’ superannuation entitlements will not change.</p>
<p>Second, public servants long-service leave obligations will be met on a required basis (that is, when the need arises), instead of setting money aside for future claims. This will align Queensland to standard practices in the rest of Australia. </p>
<p>Third, A$4.1bn of debt owed by state-owned power companies will be shifted from the government’s books to those companies’ balance sheets.</p>
<p>With this shift, power companies will become responsible for the payment of a higher proportion of interests on their debt. The estimated saving for the government is around A$600 million in four years</p>
<p>The Treasurer also announced that this is the first step of a longer-term plan to merge the existing five companies into two.</p>
<p>This third initiative, however, encounters two main objections.</p>
<p>One is that the shifting will increase the debt/revenue ratio of the power companies, which might then decide to increase the price they charge for electricity.</p>
<p>In fact, the current debt/revenue ratio for the five state-owned firms is around 55%, well below the standards for the energy sector. It is therefore the view of the government that the power companies will be able to absorb the increase in debt without having to raise prices.</p>
<p>Perhaps, a more robust objection is that the government will in the end still owe the debt that is being shifted. This is because the government owns the public companies and therefore is responsible for the payment of interest on their debt.</p>
<h2>Savings without austerity?</h2>
<p>The estimates of the government indicate the change in long-service leave arrangements will result in a debt pay down of A$3.4 billion. </p>
<p>Another debt reduction of A$2 billion can be expected from the suspension of employer superannuation contributions to the defined benefit scheme. </p>
<p>Added to the A$4.1 billion in debt shifted on to power companies, this gives a total debt reduction of A$9.6 billion over the government’s first term.</p>
<p>On paper, this is a remarkable result, achieving the debt reduction without any form of austerity. In fact, the budget also contains some significant measures on the expenditure side to support health, education and innovation, and infrastructure development.</p>
<p>The fear of being seen as a “high-spender” has somewhat limited the government’s ability and willingness to provide a stronger demand stimulus. But overall this budget strikes a reasonable compromise between the need to support the recovery and the pressure to reduce debt.</p>
<p>And perhaps, in these economic conditions, we could have not asked for more from a debutante government.</p><img src="https://counter.theconversation.com/content/44657/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Fabrizio Carmignani receives funding from the Australian Research Council for a project on the estimation of the multivariate piecewise linear continuous model and its applications in macroeconomics.</span></em></p>Austerity was never really an option for the Queensland Labor government’s first budget, and its move to shift debt make sense.Fabrizio Carmignani, Professor, Griffith Business School , Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/445732015-07-14T06:36:19Z2015-07-14T06:36:19ZQueensland’s budget puts it back on track to be a smart state<p>As part of its state budget package presented today, the Palaszczuk government in Queensland is investing A$180 million in a push to get industry, universities and government collaborating to create new jobs and drive investment in knowledge-based sectors of the state’s economy.</p>
<p>The <a href="http://statements.qld.gov.au/Statement/2015/7/13/180-million-advance-queensland-to-create-jobs-of-the-future">Advance Queensland</a> program proposes to build upon the research base created by previous state Labor governments.</p>
<p>This announcement readily adopts the ideas and language of the Smart State-era of the Beattie and Bligh <a href="http://www.abc.net.au/news/2015-07-13/queensland-budget-2015-premier-palaszczuk-vows-smarter-state/6615132">governments</a>, when funding of research infrastructure and innovation initiatives was a clear focus.</p>
<p>This is a noteworthy development, after the former Newman LNP government <a href="http://www.brisbanetimes.com.au/queensland/queensland-no-longer-the-smart-state-20120722-22hpw.html">dropped the rhetoric</a> and well-publicised commitment of that period. This led to a perceived loss of momentum in science, research and innovation in <a href="http://theconversation.com/can-the-states-help-the-nations-critical-research-infrastructure-38441">Queensland</a>.</p>
<h2>All about jobs for the future</h2>
<p>The new Advance Queensland program is described as:</p>
<blockquote>
<p>[…] a comprehensive suite of reforms that will create jobs now, and jobs for the future.</p>
</blockquote>
<p>This cleverly pitches Advance Queensland as a long-term plan (akin to the Newman government’s 30-year <a href="http://queenslandplan.qld.gov.au/">Queensland Plan</a>) requiring the faith and sustained support of the research and industry sectors. It should also appeal to voters who until now have not seen much in the way of the Labor government’s economic blueprint.</p>
<p>Significantly, Premier Annastacia Palaszczuk called Advance Queensland the core of both the budget and the government’s agenda. Regardless of budget confines, this program seems to be a go-ahead plan and apparently has the Premier’s strong backing.</p>
<p>All relevant ministers were present at the program’s launch and (in more shades of Beattie’s Smart State agenda) it was framed as a “whole of government” exercise in jobs growth and economic development.</p>
<p>After several years of impressive spending on visionary research infrastructure under the Beattie and Bligh governments, this new program noticeably steers clear of committing to further investment in facilities and other such blunt policy levers.</p>
<p>This is a wise move given the financial constraints in which Treasurer Curtis Pitt’s first budget is being framed, with apparently little in the state’s coffers for large infrastructure projects.</p>
<p>But Advance Queensland picks up where Bligh’s later focus on people, ideas and products left off. It promises A$50 million to attract and retain world-class research talent and fund increased science, technology, engineering and mathematics (STEM) programs in schools.</p>
<h2>The need for industry support</h2>
<p>Importantly, the new agenda takes some of those earlier Smart State initiatives to the next step through a “major focus on commercialisation”. It not only aims to encourage research-industry links, but promote small business start-ups and attract commercial investment through a A$76 million Business Development Fund.</p>
<p>This may sound to some like the government picking winners. But business investment in research and development (R&D) and private sector engagement with researchers and universities – the drivers of innovation – have historically been quite low by international standards in Queensland, as elsewhere in <a href="http://www.ceda.com.au/news-articles/2013/06/17/icnconference#nogo">Australia</a>.</p>
<p>Being short of what Palaszczuk called a “strong innovation and entrepreneurial culture”, it is important and desirable that government plays a facilitating role in filling some of that gap.</p>
<p>The progression of this government’s focus from “bricks to brains to business” appears to be a move in the right direction. It has been argued by successive <a href="http://www.chiefscientist.qld.gov.au/images/documents/chiefscientist/reports/bricks-to-brains-to-business-report.pdf">Chief Scientists</a> and other research leaders that the critical next phase in the development of a sustainable innovation system must see an environment where cutting-edge research is more readily translated into commercially viable products.</p>
<p>The A$180 million program stays within the minority government’s economic and political means and within the framework of Labor’s modest first budget. But it sets up a platform for “<a href="http://www.brisbanetimes.com.au/queensland/queensland-budget-2015-180m-plan-to-create-jobs-20150712-gias6x.html">playing the long game</a>” in terms of hopefully bipartisan government support.</p>
<p>Importantly, it indicates that the government doesn’t want to, and nor should it, do this by itself. The research and private sector communities have to play their part too.</p>
<h2>A welcomed move</h2>
<p>Pointedly, the <a href="https://www.qut.edu.au/news/news?news-id=92475">program’s launch</a> was held at the Queensland University of Technology, in the heart of the Brisbane CBD’s government-university-corporate nexus. Key representatives of those sectors were present, most of whom appeared well pleased that science, research and innovation is back in the political limelight.</p>
<p>As such, the program puts out positive signals but doesn’t extend the government too much in the short term. Plans are modest and perhaps seen by some as <a href="http://www.couriermail.com.au/business/backing-for-smart-state-20-but-too-little-too-late-for-queenslands-biotechnology-it-industries/story-fnihsps3-1227440500440">insufficient</a>, but there’s still enough commitment.</p>
<p>It expanded from a <a href="http://www.news.com.au/national/breaking-news/the-big-promises-in-the-qld-election/story-e6frfku9-1227202284538">A$50 million pre-election proposal</a> to a A$180 million budget <a href="http://statements.qld.gov.au/Statement/2015/7/13/advance-queensland-launch-breakfast">package</a> to make a serious statement of intent toward research funding and creation of jobs of the future.</p>
<p>Even a modest amount of funding as in this program can have a positive multiplier effect once fed into the innovation ecosystem and capitalised upon by external partners.</p>
<p>As QUT’s Vice Chancellor, Peter Coaldrake, <a href="http://blogs.abc.net.au/queensland/2015/07/advancing-queensland-through-curtis-pitts-maiden-budget.html?site=brisbane&program=612_morning">told 612 ABC Brisbane local radio</a>, while the funding amount might not be of the same magnitude as seen in the Beattie period, universities and research institutions will still welcome the availability of money.</p>
<p>They’ll also welcome the clear signal this program sends that the state government is willing to visibly back the research and innovation sectors. Such a move picks up some of the slack left by the federal government’s proposed backing away from research and infrastructure spending, amid continued uncertainty over higher education <a href="https://theconversation.com/budget-brief-how-does-science-and-research-funding-fare-41434">funding</a>.</p><img src="https://counter.theconversation.com/content/44573/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Chris Salisbury is a Research Associate with the TJ Ryan Foundation, a progressive think tank focusing on Queensland public policy.</span></em></p>The Palaszczuk government’s first budget for Queensland has promised to drive new investement and jobs in the knowledge based sectors.Chris Salisbury, Lecturer, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/275712014-06-04T02:34:48Z2014-06-04T02:34:48ZQueensland budget shows why the federation is broken<p>As Queensland Treasurer Tim Nicholls released the state budget yesterday, one could be excused for not really noticing. Long the poor cousin of Australian Federalism, state budgets rarely get much press – and rightly so.</p>
<p>The headline announcement was, of course, privatisations of more than A$33 billion in state assets. This, of course, has little consequence for state finances, as the sale of assets precludes future income streams for those assets. If anything, the higher borrowing costs and equity returns expected by the private sector, and the transaction fees involved in the sales of those assets, will make privatisations a negative net contributor to the state’s financial health – but that is another story.</p>
<p>Dig a little deeper, and things become positively soporific. Like a household budget slightly out of balance, money comes in (in the form of state taxes and mostly GST) and money goes out. The Queensland government does the things it has to do – policing, courts, housing and public works. Mostly, though, it does two things – it provides health services through public hospitals and it provides schooling through state schools.</p>
<p>Taken together, health and education equate to 53.9% of expenditures in 2012-13, rising to 54.5% in the 2013-14 year. Health and education’s share of expenses is gradually rising, not necessarily in response to any new political priorities, but rather in response to the grinding certainties of an ageing population, better health technologies and patient expectations, and increasing numbers of school-aged children.</p>
<h2>Big on promise…</h2>
<p>The current LNP government was elected in a landslide on March 24, 2012. The Labor Party was all but wiped out, reduced to a team of seven parliamentarians in a parliament of eighty nine. Clearly on the nose with voters, the outgoing government had been branded financial profligates by the incoming one – and yet little, in effect, has changed, in an absolute or relative sense, about how the money is spent.</p>
<p>Of course there have been retrenchments of public servants across the departments, and yet employee numbers are increasing again. This, of course, is as it should be, as there is real work to be done. One area where employment numbers have not budged is in the ranks of the government’s ministers. The last Bligh government had 18 ministers and 13 parliamentary secretaries, while the Newman Cabinet has 19 ministers and 12 assistant ministers – all of course with a coterie of media and policy advisers, drivers and assistants.</p>
<p>However, the real business of government goes on, and even as assets are sold and debts are paid off, the share of government expenses for various key departmental activities remains relatively steady – health increasing from $10.55 billion under Labor in 2010-11 to $12.33 billion under the LNP in 2013-14, police increasing from $1.8 under Labor to $2.0 billion under the LNP, education increasing from $7.58 billion to $8.67 billion (albeit with the addition of employment) – and the list goes on.</p>
<p>All this begs the question – what real purpose will the political apparatus of the states actually contribute in 2014? If they won’t, or can’t, do much in terms of how money is spent, what is the point?</p>
<p>The states’ roles have been in retreat since Federation – indeed every major High Court decision to assess the relative prerogative of the State and Commonwealth over the last 113 years has shifted power towards Canberra. The states now do only what Canberra does not want to do – and they do it with dwindling resources and a lack of capacity to make sensible plans in relation to future revenues and expenses.</p>
<h2>Lumped with health and education</h2>
<p>The recent federal budget showed as much – with the Commonwealth retreating from funding the Gonski reforms, leaving the states in the invidious position of having to argue for an increase to the GST to fund basic education, health and policing.</p>
<p>As a nation, we must do better. The federation is broken, and it has been broken for a long time. The most sensible answer is to start again, by abolishing the states entirely. The states, of course, are colonial relics, parochial lines on a map that have little social or economic relevance today. Developed at a time before telecommunications and decent transportation, today they could not be more anachronistic.</p>
<p>Increasingly, our challenges and opportunities are national. Our Asia-Pacific neighbours sensibly pay little attention to state boundaries when they consider our role and our future.</p>
<p>As the resource booms tapers and the challenges to public finances, state and federal, become more acute, Australians should ask again – are we citizens of Australia first, or residents of its states. If the former, why do we persist with the latter?</p><img src="https://counter.theconversation.com/content/27571/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Rice receives funding from the Australian Research Council. He is a member of the Australian Labor Party and the National Tertiary Education Union.</span></em></p>As Queensland Treasurer Tim Nicholls released the state budget yesterday, one could be excused for not really noticing. Long the poor cousin of Australian Federalism, state budgets rarely get much press…John Rice, Associate Professor in Strategic Management, Griffith UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/275402014-06-04T02:31:49Z2014-06-04T02:31:49ZQueensland budget another case of the disappearing surplus<p>With the release of a plan to <a href="http://news.ninemsn.com.au/national/2014/06/03/02/04/no-tax-hikes-in-qld-budget">sell and lease $33 billion worth of assets</a> after the next election, the state government has shifted attention away from its budget. Though in truth, it would have been quite easy to distract people from this budget, because there is nothing new.</p>
<p>We already knew that the ever-elusive budget surplus had disappeared. Two years ago I <a href="https://theconversation.com/queensland-budget-2012-experts-respond-9508">commented</a> in The Conversation that: “The forecast for a fiscal surplus in 2014/15 is nice, but it is hard to take long-term budget predictions too seriously” and also that “it is easy to predict future austerity and surpluses, but it is harder to actually make it happen”. Time has justified that scepticism. The government’s original estimate for 2014/15 was a A$0.7 billion surplus, but it is now expecting a A$2.3 billion deficit.</p>
<p>The government has blamed the deterioration in the budget on lower than expected revenue, but another reason is that the state government introduced over $1 billion of new spending measures, and also allowed public service wage costs to rise by 3.8%. While the Newman government increases spending more slowly than the previous government, the spending is still going up.</p>
<p>Of course, disappearing surpluses are nothing new. Politicians are torn between wanting to give money to demanding voters, and showing constraint to balance the budget. These dual incentives are often “solved” by handing out money today and promising to be frugal later. The federal government has also suffered from disappearing surpluses in recent years. In 2011 the federal government estimated future surpluses of $3.5bn (2012/13), $3.7bn (2013/14) and $5.8bn (2014/15). Compare that with the most recent estimates released last month of -$18.8bn (2012/13), -$49.9bn (2013/14) and -$29.8bn (2014/15).</p>
<p>In this context, the government’s forecast of a $0.9 billion surplus in 2015/16 should be taken with a few grains of salt.</p>
<p>This budget was boring because the government wants to avoid making any tough cuts, but they still hope to achieve their 2015/16 surplus. While the lack of reform will disappoint economic liberals and the lack of extra spending will disappoint special interest groups, the value of this budget rests on whether the government actually succeeds in balancing the budget. If the government can navigate the next year (including an election) and get to the 2015 budget with its wafer-thin surplus intact, then history will show this budget was appropriate.</p>
<p>But that is a big “if”.</p>
<p>The problem of debt and deficits is a slow burning issue. Good macroeconomic management means having a balanced budget over the business cycle, which requires the government to have budget surpluses when economic growth is normal so that it can run budget deficits when the economy contracts. </p>
<p>Given that economic growth in Queensland remains healthy (and above the Australian average), the state should already be back in surplus. The need for a surplus is made more necessary by the fact that Queensland already has high levels of government debt, and that it needs to be preparing now for future budget pressures caused by an ageing population. </p>
<p>Good financial management demands that there are no more “disappearing surpluses”. Budget promises notwithstanding, that is something that we won’t know until next year. </p><img src="https://counter.theconversation.com/content/27540/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>John Humphreys was the founder of the Liberal Democrats, however is no longer active in politics.</span></em></p>With the release of a plan to sell and lease $33 billion worth of assets after the next election, the state government has shifted attention away from its budget. Though in truth, it would have been quite…John Humphreys, Visiting Lecturer of Economics, The University of QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/149562013-06-05T05:41:02Z2013-06-05T05:41:02ZQld Budget deficit irrelevant: waste should be the issue<figure><img src="https://images.theconversation.com/files/25047/original/yh797vyy-1370393852.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">The debate around the size of Queensland's surplus or deficit is shortsighted: governments should have room to move if they need to, and controlling waste should be the issue.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>Queensland Treasurer Tim Nicholls’ second budget has the usual collection of initiatives and some very good ones at that. Increased spending on education, disability services and health will nearly always be welcome, of course, but the regional focus is especially noteworthy. On the downside, cost of living is something that looms large for most people and some items in this budget will be viewed as contributing to these costs rather than alleviating them. </p>
<p>All of this makes for interesting discussion; but in this political environment, the bottom line - deficit or surplus - was always going to be the main public focus. The Treasurer and his colleagues have done little to discourage this: a substantial part of the Newman government’s political message has been around the previous Labor government’s profligacy. However, sooner or later, a lingering deficit becomes the current government’s political burden. The tables turn.</p>
<p>“Balance” figures prominently in the Treasurer’s budget speech. Indeed, he quotes himself from 2012: “Maintaining that balance, in the absence of extraordinary events, will complete the first stage in repairing Queensland’s finances.” Balance usually means only one thing: a balanced budget. At least, if a surplus cannot be achieved then we should at least aim for a modest deficit.</p>
<p>The deficit, however, is quite a bit less modest than expected, coming in at $7.7 billion against a forecast of $4.6 billion, with $2.2 billion in revenue written down since 2012-13 budget due to a fall in coal exports, falling state taxes including land tax and the cost of the state’s “summer of natural disasters”. The budget is also expected to remain in deficit next year. It is only in 2015-16 by Treasury’s estimates that it will return a $1 billion surplus.</p>
<p>None of this is certain, of course, and Queensland’s natural environment has already presented numerous challenges - such as the devastating 2011 floods - to the State’s financial overseers. Among other things, this is why the preoccupation with surpluses and deficits is so strange and potentially harmful. </p>
<p>Events like the 2011 floods and the second wave of natural disasters do happen from time to time. When they happen, the money must be spent to fix the damage and if the government doesn’t have the money at the time it has to be borrowed.</p>
<p>We should shift our focus away from the preoccupation over whether surpluses are “good” and deficits are “bad” and focus instead on what taxpayer money is being spent on. </p>
<p>Deficits that emerge because a government is forced to rebuild communities and infrastructure in the aftermath of a natural disaster are not “bad”. A surplus that emerges when booming revenues more than make up for government profligacy is not “good”. </p>
<p>If we focus too much on the surplus or deficit, we fail to consider these important things. Most people see nothing wrong with borrowing to invest in productive assets. Investing in new assets or repairing existing ones is an activity that can have substantial longer term advantages. It is the case, however, that debt and the interest payments that attend it must be carefully managed. </p>
<p>The government’s approach is to reduce the borrowing commitment over the next two years and save interest in the process. The Treasurer says the government will save $750 million in interest by reducing the borrowing requirement by $6 billion. This is money, the Treasurer says, that can be spent on services. All well and good, as long as it is not wasted. </p>
<p>The problem it seems is that any and all budget deficits imply waste while directing money to services is accepted as sound policy. But governments that run a deficit because they are investing in productive assets, as long as they have the rest of their house in order and as long as the appropriate amount of prudence has been applied, should not be criticised for doing so. </p>
<p>Governments should not, through fear of criticism of their fiscal position, fail to invest in productive assets that have a future return that more than makes up for their current cost. Conversely, governments that run surpluses should not escape a critical review of their spending initiatives. </p>
<p>The good thing, one would think, about a government focused on “repairing the state’s finances” is that it may focus more than usual on each penny it intends to spend and identify with more than usual diligence those pennies that it might save. The avoidance of waste is a habit that no-one would be displeased to see displayed by those holding the state’s purse strings. </p>
<p>Every budget contains expenditures that will fit into the “waste” category from someone’s point of view; but leaving these sorts of value judgements aside, the casting of a critical eye over the latest detailed account of the state’s finances should be scanning for waste, not the size of the surplus or deficit.</p><img src="https://counter.theconversation.com/content/14956/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Peter Phillips does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Queensland Treasurer Tim Nicholls’ second budget has the usual collection of initiatives and some very good ones at that. Increased spending on education, disability services and health will nearly always…Peter Phillips, Associate Professor (Finance & Banking), University of Southern QueenslandLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/138622013-05-01T03:52:11Z2013-05-01T03:52:11ZWhy Queensland didn’t need to sell the family farm<figure><img src="https://images.theconversation.com/files/23090/original/nwqhrh7d-1367376341.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Queensland Premier Campbell Newman announces his government's plan to outsource, rather than completely privatise, many public services.</span> <span class="attribution"><span class="source">AAP/Dan Peled</span></span></figcaption></figure><p>Back in July last year Queensland Premier Campbell Newman was in a very black mood. All was gloom and doom in the Sunshine State, as he warned <a href="http://www.abc.net.au/news/2012-07-24/qld-on-verge-of-bankruptcy-newman/4151006">Queensland was “on the way to being bankrupted”</a> without tough action. Back then, his government was shaping up to do a Jeff Kennett, painting the grimmest of pictures that would justify massive cuts to the Queensland public sector, just as the former Victorian premier did in his first term in power.</p>
<p>Yesterday was the day when it was all meant to come together, with Newman having to make the biggest call of his political life. In announcing <a href="http://www.treasury.qld.gov.au/coa-response/">his government’s response to an audit of the state’s finances</a>, he had to decide whether his Government would support the sale of major pieces of Queensland’s “family farm” - particularly the state’s multi-billion-dollar power assets.</p>
<p>To the surprise of many, and despite a lot of pressure from the money men at the top end of town, Newman declared <a href="http://www.couriermail.com.au/news/queensland/premier-campbell-newman-outlines-government-response-to-commission-of-audit/story-e6freoof-1226632086888">“we will save the farm”</a>, rather than “taking the easy way out and having a fire sale of assets”. Instead, he outlined a much quieter and in some ways craftier program of outsourcing and competitive tendering. Private operators are likely to end up leasing and running more state-owned services, from ports, trains and buses, through to health care, including elective surgeries.</p>
<p>Queenslanders are no friend of privatisation, that’s for sure. Only 14 months ago, they savagely <a href="http://www.smh.com.au/opinion/why-privatisation-killed-queensland-labor-20120326-1vugf.html">punished the Bligh Labor government for going down this path</a> without a mandate. It would need a pretty strong case to convince a seasoned politician like Newman to try that option again. So how strong was the case in favor of a fire sale?</p>
<h2>A closer look at the books</h2>
<p>Just days after being elected, the Newman government appointed former federal Treasurer Peter Costello to lead a A$2.2 million audit of Queensland’s finances. The 1000-page final report - released in full yesterday - recommended selling the state’s electricity and port assets to raise more than A$25 billion and rapidly reduce debt.</p>
<p>Costello continued the hard sell right up until the last moment, including inside the cabinet room for his final briefing to MPs. In an article in <a href="http://www.afr.com/p/national/qld_finances_could_get_worse_costello_esrShaCeBbeX2cEMypkXgO">the Australian Financial Review</a> that cited a debt figure of A$82 billion, Costello declared: “Queensland has a problem. Its credit rating has been downgraded, it’s paying higher and higher interest costs and something has got to happen… If it doesn’t change, it’s just going to get worse and worse.” </p>
<p>But just how gloomy is the Sunshine State’s budget outlook?</p>
<p>While A$82 billion sounds like a lot of debt, the picture was always more complex than Costello would have us believe.</p>
<figure class="align-right zoomable">
<a href="https://images.theconversation.com/files/23082/original/q86svrrj-1367373286.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/23082/original/q86svrrj-1367373286.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/23082/original/q86svrrj-1367373286.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=524&fit=crop&dpr=1 600w, https://images.theconversation.com/files/23082/original/q86svrrj-1367373286.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=524&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/23082/original/q86svrrj-1367373286.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=524&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/23082/original/q86svrrj-1367373286.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=659&fit=crop&dpr=1 754w, https://images.theconversation.com/files/23082/original/q86svrrj-1367373286.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=659&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/23082/original/q86svrrj-1367373286.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=659&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">General government balance sheet, Mid-Year Economic and Budget Update, p.15.</span>
</figcaption>
</figure>
<p>This table is taken from last December’s <a href="http://www.treasury.qld.gov.au/office/knowledge/docs/mid-year-review/mid-year-review-2012-13.pdf">Mid-Year Economic and Budget Update</a>. It shows the state’s general government balance sheet for the period from 2011/12 through to 2015/16. While it is true that gross debt or total liabilities will exceed $80 billion this financial year, the net debt figure (or gross debt less financial assets) is very different.</p>
<p>The Queensland general government sector in fact had no net debt in 2011/12. And while net debt is projected to grow to a peak of A$9.6 billion by 2013/14, it then starts to fall and then continues its downward trajectory.</p>
<p>Still, you might say, A$9.6 billion is a lot of money to owe. That would be true were we talking about a household or a business - but not for the Government of Queensland, which can tax its citizens to pay the bills and tax them more heavily if it really has to do so. Queensland is, after all, one of Australia’s lowest-taxed jurisdictions, with its per capita taxation in 2012/13 more than $450 below than the Australian average.</p>
<p>But according to Costello’s Commission of Audit, net debt is not the best measure of the state’s liabilities. It includes the financial assets that have been built up to fund the state’s super schemes and which therefore are not available to cover the gross debt on issue. It recommends a different measure, called net financial liabilities:</p>
<p>“As the net debt measure includes investments, it takes account of the large investments Queensland uses to offset its superannuation liability, it does not take account of the liabilities. Under existing Government policy, these investments are held to meet the State’s superannuation liability. Because these investments are not available to reduce gross debt, net debt is not a suitable metric to target in setting an appropriate fiscal strategy… The Commission consider that the most suitable measure of debt is the concept of net financial liabilities”.</p>
<p>The State’s net financial liabilities (A$39 billion in 2011/12) are much higher than its net debt, and it is this that needs to be paid down. But how good is this as a measure of the State’s balance sheet? The answer is not very, because it ignores the physical and other assets that are crucial to the balance sheet equation (worth a cool A$182 billion in 2011/12).</p>
<h2>What’s a worthier economic measure?</h2>
<p>Net worth is generally considered to be a better measure, for it includes all assets and liabilities and not just those that are financial. Far from being in trouble, Queensland is in fact well and truly in the black according to this measure, with a net worth in the general government sector exceeding A$170 billion in 2011/12, climbing steadily to almost A$180 billion not long after the next scheduled election.</p>
<p>All this is not to say that the Queensland budget is in fine shape. Far from it. But its problems stem not from its balance sheet but the substantial gap between operating income and expenses. Queensland’s operating budget shifted from surplus to deficit in four very difficult years, when revenues went into an unexpected spin and have yet to fully recover. This year the deficit is tipped to exceed A$11 billion, which is very large on any measure and would seem to be genuine cause for concern.</p>
<p>However, this includes one-off expenses associated with flood damage that cost more than A$4 billion. It also includes almost A$1 billion set aside for redundancies arising from Newman’s first budget. When these are excluded, the deficit is a more manageable A$6.3 billion. This is still large, but importantly is not tipped to last forever.</p>
<figure class="align-center zoomable">
<a href="https://images.theconversation.com/files/23088/original/crgb8nny-1367375004.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=1000&fit=clip"><img alt="" src="https://images.theconversation.com/files/23088/original/crgb8nny-1367375004.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/23088/original/crgb8nny-1367375004.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=359&fit=crop&dpr=1 600w, https://images.theconversation.com/files/23088/original/crgb8nny-1367375004.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=359&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/23088/original/crgb8nny-1367375004.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=359&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/23088/original/crgb8nny-1367375004.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=452&fit=crop&dpr=1 754w, https://images.theconversation.com/files/23088/original/crgb8nny-1367375004.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=452&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/23088/original/crgb8nny-1367375004.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=452&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px"></a>
<figcaption>
<span class="caption">Fiscal balance, Mid-Year Economic and Budget Update, p.4.</span>
</figcaption>
</figure>
<p>The <a href="http://www.treasury.qld.gov.au/office/knowledge/docs/mid-year-review/mid-year-review-2012-13.pdf">Mid-Year Economic and Budget Update</a> also shows that the operating account is projected to return to surplus by 2014/15, with the corrective measures already put in place being enough to turn the ship around without the need for any more drastic action.</p>
<p>If Queensland’s debt is not large, its net worth is positive, and the government by its own admission reckons it is on track to achieve its financial principles, why bother with a massive asset sales program that would antagonize the people?</p>
<p>Far better to be crafty and privatise services in other ways, through an <a href="http://www.brisbanetimes.com.au/queensland/in-plain-english-commission-of-audit-response-20130501-2irp6.html?rand=1367358381141">outsourcing and competitive tendering program</a> that can turn the public sector inside out, but hopefully jeopardise fewer MPs’ seats. For Premier Campbell Newman, who resides in a marginal electorate himself, hearing that the money men are disappointed may not be such a bad thing.</p><img src="https://counter.theconversation.com/content/13862/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>David Hayward receives funding from state and local government departments and trade unions for contract research. He is a Board member of Melbourne Health, incorporating the Royal Melbourne Hospital.</span></em></p>Back in July last year Queensland Premier Campbell Newman was in a very black mood. All was gloom and doom in the Sunshine State, as he warned Queensland was “on the way to being bankrupted” without tough…David Hayward, Dean, School of Global, Urban and Social Studies, RMIT UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/123282013-03-25T00:40:57Z2013-03-25T00:40:57ZFunding cuts threaten Indigenous independence in Queensland<figure><img src="https://images.theconversation.com/files/20689/original/yd5fk7hv-1361926973.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Indigenous Queenslanders should be able to choose their own path.</span> <span class="attribution"><span class="source">AAP/Dave Hunt</span></span></figcaption></figure><p><a href="http://www.townsvillebulletin.com.au/article/2013/02/18/375682_news.html">Funding cuts</a> announced to Queensland Aboriginal communities last month will of course affect the budgets of Aboriginal Shire Councils. But their impact will be felt much more further afield than just within council offices. Put simply, these cuts will reduce the autonomy of Aboriginal communities across the state.</p>
<p>This policy change plays into the ideas pushed by some prominent Indigenous people that welfare dependency is ruining Aboriginal communities. Marcia Langton’s 2012 <a href="http://www.abc.net.au/radionational/programs/boyerlectures/2012-boyer-lectures/4305696">Boyer Lectures</a> are an example of this argument. </p>
<p>One commonly suggested solution to this “dependency” is <a href="http://www.theaustralian.com.au/national-affairs/opinion/with-apologies-pm-home-ownership-is-the-key/story-e6frgd0x-1226578237398">home ownership</a>. If people own homes, they must earn enough income to pay mortgage, rates and insurance. So if we can encourage Aboriginal home ownership, then we can see greater employment rates and improvement in other statistics - right?</p>
<p>The problem with this is the persistent idea that Aboriginal people should be more “like us” and less like themselves. </p>
<h2>Aboriginal Shire Councils</h2>
<p>Queensland’s former Aboriginal reserves became formalised communities under <a href="http://www.derm.qld.gov.au/nativetitle/pdf/ilar/ilar_ala_leasing_manual.pdf">Deed of Grant in Trust</a> status in the late 1980s, “for the benefit of Aboriginal inhabitants or for Aboriginal purposes”. </p>
<p>The land was given communally to <a href="http://www.dlg.qld.gov.au/indigenous-councils/about-indigenous-councils.html">Aboriginal Community Councils</a> (now Aboriginal Shire Councils), rather than sold or gifted in blocks. Because the land is communally owned, Aboriginal councils don’t collect rates.</p>
<p>The Queensland government subsidised Aboriginal communities through the <a href="http://www.qlggc.qld.gov.au/financial-assistance-grant.shtml">state government financial assistance</a> program to make up the shortfall. In addition to jobs and social services, the Newman government is <a href="http://www.businessspectator.com.au/bs.nsf/Article/Macklin-concerned-QLD-cuts-will-affect-indigenous--pd20121003-YPSWB?OpenDocument">cutting this funding</a> to Aboriginal communities. The <a href="http://www.townsvillebulletin.com.au/article/2013/02/18/375682_news.html">reason</a> is to increase self-sufficiency and decrease Aboriginal dependency on handouts, according to local government Minister David Crisafulli. </p>
<p>However, the cuts will have the opposite effect.</p>
<h2>Autonomy and self-determination</h2>
<p>Since the 1970s, Australia has accepted the idea that Aboriginal communities have the <a href="http://www.humanrights.gov.au/social_justice/info_sheet.html">right to self-determination</a>. This stance was renewed when Kevin Rudd supported the <a href="http://www.un.org/esa/socdev/unpfii/documents/DRIPS_en.pdf">United Nations Declaration on the Rights of Indigenous Peoples</a>. </p>
<p>Anthropologist Robert Tonkinson writes about “<a href="http://www.aiatsis.gov.au/events/wentworth/docs/Tonkinson.pdf">self-determination</a>” in the 1970s. Previously, Aboriginal people had little control over their lives. Under
“self-determination” policies, they were expected to manage communities, but without training. </p>
<p>The cuts to the financial assistance are similar - funding is being cut, with no plans in place to enable real self-sufficiency.</p>
<p>Self-determination, from government perspectives, really means self-management. It is seen as a major break from the previous policy of assimilation - and it is a very different approach on many practical levels. </p>
<p>But the underlying principle is still that Aboriginal people should fit into white society. This was the rationale behind assimilation, behind self-determination in the 1970s and behind the <a href="http://www.abc.net.au/indigenous/special_topics/the_intervention/">2007 Northern Territory Intervention</a>. And it is the rationale behind the current Queensland government funding cuts.</p>
<p>Aboriginal communities have different understandings of “self-determination”. For them, it means “<a href="http://www.aiatsis.gov.au/events/wentworth/docs/Tonkinson.pdf">freedom from paternalistic and authoritarian structures</a>” (in Tonkinson’s words). It means being able to choose their own path – whether that path heads towards economic independence or not. </p>
<h2>Playing the game</h2>
<p>In July 2012, American academic <a href="http://udallcenter.arizona.edu/personnel/scornell.php">Stephen Cornell</a> gave a public lecture in Sydney. He spoke of the meaning of self-determination for America’s First Nations peoples. </p>
<p>In America, he reported, tribes set the rules of the game. They determine the structure of their tribal governments. They decide whether or not to pursue economic self-sufficiency and profits.</p>
<p>In contrast, for Australian Aboriginal people, there is one game, and the rules are set by the government. Aboriginal groups are invited to play, but they have to follow the rules. </p>
<p>If Indigenous Australians exercise real autonomy, for example if they choose not to live up to the neoliberal dream of home ownership and capitalist productivity, they are labelled “dysfunctional”. Then they are kicked out of the game.</p>
<p>The Queensland government’s State Government Financial Assistance gave Aboriginal communities financial autonomy. Although they relied on this “government handout”, it gave communities the option to decide on their future.</p>
<p>Taking the funding away will have severe impacts on Aboriginal communities. They will lose jobs, programs, and services. But they will also lose this opportunity for real autonomy. </p><img src="https://counter.theconversation.com/content/12328/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Theresa Petray does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Funding cuts announced to Queensland Aboriginal communities last month will of course affect the budgets of Aboriginal Shire Councils. But their impact will be felt much more further afield than just within…Theresa Petray, Lecturer in Sociology & Anthropology, James Cook UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/97892012-09-30T20:40:12Z2012-09-30T20:40:12ZBrace yourself for a fatter, unhealthier Queensland after health promotion cuts<figure><img src="https://images.theconversation.com/files/15963/original/wvbh2x6v-1348804744.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">All available evidence tells us that more investment is needed in preventive health – not cuts.</span> <span class="attribution"><span class="source">angelsk</span></span></figcaption></figure><p>Queensland appears intent on dismantling its public and preventive health services. Health Minister Lawrence Springborg last week outlined the rationale for <a href="http://www.couriermail.com.au/news/payroll-workers-in-queensland-health-facing-premier-campbell-newmans-cost-cutting-axe/story-e6freon6-1226479804782">getting rid of more than 150 jobs</a> in nutrition, health promotion and Indigenous health, <a href="http://www.couriermail.com.au/news/payroll-workers-in-queensland-health-facing-premier-campbell-newmans-cost-cutting-axe/story-e6freon6-1226479804782">arguing</a> previous “campaigns” and “messaging” around obesity were “piecemeal” and had “grossly failed”.</p>
<p>The plan now, the minister <a href="http://statements.cabinet.qld.gov.au/Statement/2012/9/24/springborg-calls-in-commonwealth-debt-on-national-health-reform">argued</a>, is to focus on a new centrally-driven and high-profile approach.</p>
<p>On the surface that doesn’t sound so bad. But even a cursory glance at the details suggests something else is going on.</p>
<p>Of particular concern is the Queensland government’s call for the Commonwealth to invest more in preventive health through the Australia-wide <a href="http://www.yourhealth.gov.au/internet/yourhealth/publishing.nsf/Content/medilocals-lp-1#.UGUVu_lNtHg">Medicare Local</a> network. This may be a bold attempt to shift costs, or a fundamental misunderstanding of what preventive health is all about – or both.</p>
<p>Although it’s good to see Minister Springborg confirming a commitment to “health prevention campaigns” and “evidence-based medicine”, questions remain as to what this really means for public health in Queensland.</p>
<h2>Tackling obesity</h2>
<p>One challenge working in the area of obesity is that most people, including decision makers, eat and move, and so are self-informed experts. If this was brain surgery, expert briefings on the evidence would be sought before decisions were made. But addressing obesity is more complex.</p>
<p>To inform decisions about obesity intervention, the scientific evidence needs to be assessed at three levels. Firstly to identify <em>whether</em> something should be done, then to investigate <em>what</em> should be done, and finally to inform <em>how</em> something should be done.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/15962/original/tpx3nx92-1348804186.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/15962/original/tpx3nx92-1348804186.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=772&fit=crop&dpr=1 600w, https://images.theconversation.com/files/15962/original/tpx3nx92-1348804186.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=772&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/15962/original/tpx3nx92-1348804186.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=772&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/15962/original/tpx3nx92-1348804186.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=970&fit=crop&dpr=1 754w, https://images.theconversation.com/files/15962/original/tpx3nx92-1348804186.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=970&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/15962/original/tpx3nx92-1348804186.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=970&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">It’s unclear what Minister Springborg has in mind for health promotion in Queensland.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>At the first level, there is little disagreement about the magnitude of the problem; something definitely needs to be done about obesity – and urgently. The epidemic of overweight and obesity is sweeping most developed economies. In Australia, the <a href="https://theconversation.com/mapping-australias-collective-weight-gain-7816">prevalence</a> has doubled over the past 30 years – it’s now above 60% in adults and around 25% in children.</p>
<p>Obesity is bad news for the health system. In Queensland, excess body weight has now overtaken cigarette smoking as the single greatest risk factor contributing to the burden of disease. In 2008, the health system <a href="http://www.health.qld.gov.au/epidemiology/documents/overweight-2011-fs.pdf">cost of obesity</a> was A$391 million, with an additional cost of about A$9.96bn in lost well-being across all sectors throughout the state.</p>
<p>But the good news is that most obesity-related conditions are preventable. That such an enormous expense and burden is avoidable, must surely be of interest to any government concerned about its economic outlook, and the well-being and health of its people.</p>
<h2>What should be done about it?</h2>
<p>To answer, it’s necessary to look at both causes and treatment outcomes.</p>
<p>A surprisingly small daily excess in energy intake is sufficient to account for the weight gain seen in Australians over time. </p>
<p>It’s now clear that changes to our <a href="https://theconversation.com/education-wealth-and-the-place-you-live-can-affect-your-weight-7941">socioeconomic environment</a> are responsible for the current epidemic. These changes actually make it easier for all of us (but particularly those who have limited resources and opportunities) to consume more energy-dense and nutrient-poor foods and drinks, to eat too much, to sit longer and move less. </p>
<p>Being overweight is a normal physiological response to an abnormal “<a href="https://theconversation.com/fat-of-the-land-how-urban-design-can-help-curb-obesity-6445">obesogenic</a>” environment. And this is exactly why losing weight is so hard – and keeping it off is harder still. </p>
<p><a href="http://www.nhmrc.gov.au/nics/nics-programs/clinical-practice-guidelines-management-overweight-and-obesity-adults-children-an">Studies show</a>consistently that just telling people to change their behaviour is bound to fail. Generally, mass media advertising increases awareness, but only leads to behaviour change when supported by complementary policies, programs and services provided within the community.</p>
<figure class="align-center ">
<img alt="" src="https://images.theconversation.com/files/15958/original/kpz63n3m-1348803755.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&fit=clip" srcset="https://images.theconversation.com/files/15958/original/kpz63n3m-1348803755.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=400&fit=crop&dpr=1 600w, https://images.theconversation.com/files/15958/original/kpz63n3m-1348803755.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=400&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/15958/original/kpz63n3m-1348803755.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=400&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/15958/original/kpz63n3m-1348803755.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=503&fit=crop&dpr=1 754w, https://images.theconversation.com/files/15958/original/kpz63n3m-1348803755.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=503&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/15958/original/kpz63n3m-1348803755.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=503&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">To reduce obesity, we need to make it easier for people to make healthier choices.</span>
<span class="attribution"><span class="source">robnguyen</span></span>
</figcaption>
</figure>
<h2>How can we achieve healthy weight at a population level?</h2>
<p>Strategically, the best approach to obesity prevention involves <a href="https://theconversation.com/why-were-losing-the-battle-of-the-bulge-the-politics-of-obesity-prevention-8304">regulatory reform</a>. This has been demonstrated repeatedly in other public health areas such as infectious disease, traffic safety and tobacco control. However, there is little evidence that any governments in Australia currently want to go down this path to combat obesity.</p>
<p>So at a more pragmatic, operational level, the evidence points to two main areas:</p>
<ol>
<li><p>Counteract the gross misinformation about food, dieting and exercise so rampant in our society and, at the same time,</p></li>
<li><p>Influence sectors beyond health to improve the social and physical environment to make it easier for people to make healthier choices.</p></li>
</ol>
<p>And that is exactly what the dismissed nutrition, Indigenous and health promotion workforce <em>was</em> doing in Queensland.</p>
<p>Among many projects, they worked to improve the food supply in child care centres, schools, workplaces, health facilities and remote communities, and encouraged greater physical activity through urban planning. They ran effective, group-based behaviour modification programs to support adoption of healthy habits. </p>
<p>In areas such as mental health and infant feeding, they developed evidence-based training materials and resources to help lighten the workload of clinicians. And their efforts <em>were</em> having traction and providing cost- effective health outcomes for the state. </p>
<p>In 2007, the rate of measured (rather than self-reported) healthy weight among children in Queensland was <a href="http://www.health.qld.gov.au/cho_report/2008/documents/2008choreport.pdf">2% to 3% higher than in other states</a> where comparable data was available. This equates to 3,000 less children becoming overweight per year, and 1,200 fewer future cases of Type 2 Diabetes per year by 2015.</p>
<p>At its peak, the multi-strategy <a href="http://www.gofor2and5.com.au/">Go for 2 and 5</a> fruit and vegetable promotion program exceeded targets, <a href="http://www.health.qld.gov.au/ph/documents/hpu/healthykidsqld2006.pdf">resulting in</a> an additional turnover of A$9.8 million of fresh produce per month in Brisbane alone, and a technical saving of A$55 million per year to the ill-health system state-wide. </p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/15961/original/9c3gb72t-1348804123.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/15961/original/9c3gb72t-1348804123.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=901&fit=crop&dpr=1 600w, https://images.theconversation.com/files/15961/original/9c3gb72t-1348804123.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=901&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/15961/original/9c3gb72t-1348804123.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=901&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/15961/original/9c3gb72t-1348804123.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1133&fit=crop&dpr=1 754w, https://images.theconversation.com/files/15961/original/9c3gb72t-1348804123.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1133&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/15961/original/9c3gb72t-1348804123.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1133&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Health promotion activities work to improve rates of breast feeding.</span>
<span class="attribution"><span class="source">Ania i Artur Nowaccy</span></span>
</figcaption>
</figure>
<p>Since 2004, adult physical activity participation rates had <a href="http://www.health.qld.gov.au/cho_report/2008/documents/2008choreport.pdf">increased by over 34%</a>. </p>
<p>And since 2003, rates of exclusive breastfeeding for the first six months of life <a href="http://www.health.qld.gov.au/cho_report/2008/documents/2008choreport.pdf">had quadrupled</a>, and the proportion of infants breastfed at one and six months had increased substantially.</p>
<p>These results demonstrate that preventive health services provided the front line, indeed the vanguard, of medical ill-health services – helping to reduce waiting lists and increase the likely effectiveness of clinical treatment.</p>
<h2>What happens next?</h2>
<p>Within the health sector, preventive health interventions to address obesity must be applied across the whole continuum – not only in primary care settings like Medicare Locals. But most importantly, concerted, sustained effort is needed beyond the health sector, with non-government organisations, industry and all members of the community.</p>
<p>So, fingers crossed that the promised new “campaigns” will provide more than expensive advertising telling us all to lose weight. And fingers crossed that Medicare Locals will have the resources and abilities to foster partnerships to improve the toxic “obesogenic” environments that continually undermine health messages.</p>
<p>Because, if not, we will definitely lose the war against obesity and growing rates of chronic disease in Queensland. All available evidence tells us that <em>more</em> investment is needed in preventive health – not cuts.</p><img src="https://counter.theconversation.com/content/9789/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Amanda Lee does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>Queensland appears intent on dismantling its public and preventive health services. Health Minister Lawrence Springborg last week outlined the rationale for getting rid of more than 150 jobs in nutrition…Amanda Lee, Professor, School of Public Health and Social Work; School of Exercise and Nutrition Sciences, Queensland University of TechnologyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/97332012-09-25T20:19:49Z2012-09-25T20:19:49ZCensoring public health in Queensland - a dangerous precedent?<figure><img src="https://images.theconversation.com/files/15743/original/h4x4h45v-1348206803.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Queensland Health Minister Lawrence Springborg announcing job cuts in his department on September 7, 2012.</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>Beyond the recent publicity around cuts to health and other portfolios, something deeply disturbing – even sinister – is occurring in Queensland. </p>
<p>The state government is implementing health policies on the run and cutting health jobs and services. This has happened before around the country and will eventually be turned around, albeit not before a deal of harm has been done. </p>
<p>Even this week, <a href="http://www.smh.com.au/queensland/another-44m-cut-from-health-grants-20120924-26fsf.html">there is news</a> of yet more cuts to prevention programs. But more disturbing still, and a move that should send alarm bells ringing around the country, is the Queensland government’s decision to gag health organisations, health professionals and public debate on health issues.</p>
<p>A number of of Queensland Health’s recent problems – from Bundaberg to payroll disasters – followed historical underfunding of key control processes, and came to light in part because concerned people had the courage to speak out.</p>
<p>There is a long history in public health of measures that were initially resisted or opposed, speedily becoming accepted as part of a modern, civilised society. We would not be one of the world’s longest-lived populations without advances in public health such as sanitation and safe water, safe food, safe environments, immunisation, control of infectious diseases, screening, speed limits, seat belts, random breath testing, and tobacco control. </p>
<p>Each of these advances met initial resistance. None of them – not a single one of the public health advances we now regard as vital – would have been implemented without public health advocacy.</p>
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<img alt="" src="https://images.theconversation.com/files/15744/original/tf6xx94d-1348207021.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/15744/original/tf6xx94d-1348207021.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=779&fit=crop&dpr=1 600w, https://images.theconversation.com/files/15744/original/tf6xx94d-1348207021.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=779&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/15744/original/tf6xx94d-1348207021.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=779&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/15744/original/tf6xx94d-1348207021.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=979&fit=crop&dpr=1 754w, https://images.theconversation.com/files/15744/original/tf6xx94d-1348207021.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=979&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/15744/original/tf6xx94d-1348207021.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=979&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Pioneering epidemiologist John Snow (1813-1858).</span>
<span class="attribution"><span class="source">Rsabbatini/Wikimedia Commons</span></span>
</figcaption>
</figure>
<h2>A troubled history</h2>
<p>There is nothing new about opposition to public health advocacy. When sanitary reforms were being debated in England in the 1850s, led by the pioneering epidemiologist John Snow, the London Times thundered, “We prefer to take our chances of cholera and the rest than be bullied into health by Mr. Snow”.</p>
<p>But Snow persevered, achieving changes that led the way to advances there and elsewhere. Since then, we have seen a plethora of public health advances because of pressure from health groups, whether professional organisations such as the <a href="http://ama.com.au/">Australian Medical Association</a> (AMA), or issue-based non-governmental organisations (NGOs), such as the various cancer councils and the <a href="http://www.heartfoundation.org.au/Pages/default.aspx">Heart Foundation</a>. </p>
<p>These external pressures are often encouraged by health ministers who need help generating support for action in Cabinet and the community: after legislation or other action, they frequently express their appreciation to the organisations concerned.</p>
<p>It is reasonable and normal for governments to expect that public servants follow conventional protocols in relation to public comment. It is also reasonable to expect that NGOs engaged in advocacy do so in a sensible and civilised manner. It is, however, unreasonable and dangerous for governments to gag health NGOs, and to take action that will specifically preclude them from advocating for change.</p>
<h2>Gagging order</h2>
<p>Health departments traditionally fund large numbers of NGOs to carry out crucial work in the community. Queensland Health Department contracts with these NGOs will now be subject to censorship. Any NGO receiving 50% or more of its funding from the state will be precluded from advocating for state or federal legislative change – even from providing website links to other organisations’ websites that do so.</p>
<p>NGOs justifiably fear that the 50% figure is just a starting point, and that this censorship may ultimately apply to any funding. Many now dare not speak out. Even those not currently in receipt of funding but thinking of applying will feel constrained.</p>
<p>The condition relating to websites means that funded NGOs may not be able to provide links to organisations such as <a href="http://www.cancer.org.au/">Cancer Council Australia</a>, the Heart Foundation, or even the AMA and the <a href="http://www.who.int/en/">World Health Organization</a>, all of which advocate for legislative change.</p>
<p>Government-funded NGOs are often also funders of research, which may conclude that legislation or regulation is appropriate. The new Queensland Health approach will preclude reputable health organisations from even discussing the implications of such research.</p>
<figure class="align-left ">
<img alt="" src="https://images.theconversation.com/files/15746/original/4jbn2scg-1348207887.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/15746/original/4jbn2scg-1348207887.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=900&fit=crop&dpr=1 600w, https://images.theconversation.com/files/15746/original/4jbn2scg-1348207887.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=900&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/15746/original/4jbn2scg-1348207887.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=900&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/15746/original/4jbn2scg-1348207887.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1131&fit=crop&dpr=1 754w, https://images.theconversation.com/files/15746/original/4jbn2scg-1348207887.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1131&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/15746/original/4jbn2scg-1348207887.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1131&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Many public health measures were initially resisted or opposed.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>An <a href="https://repository.uwa.edu.au/R/-?func=dbin-jump-full&object_id=14938&local_base=GEN01-INS01">important 2007 paper</a> showed that there was already cause for concern about suppression of information in the health sector. It noted international precedents where exposure and comment from outside government were crucial in preventing further public health catastrophes, such as the 1980 <a href="http://www.ncbi.nlm.nih.gov/pubmed/7118327">Black Report</a> in the United Kingdom, the Chernobyl disaster in the Soviet Union, the SARS outbreak in China, and harmful mercury blood levels in the United States.</p>
<h2>But why?</h2>
<p>So what justification has the Queensland Government offered for its descent into the dark ages?</p>
<p>First, they assert that NGOs should focus on their “core activities”, not advocacy. But seeking action that will protect the health of the community is the most fundamental core activity for public health organisations. Even if they cannot understand this, it is outrageous that a government providing only some of an organisation’s funding should prohibit action carried out with funding from other sources.</p>
<p>Second, they state in relation to funded groups that “we would expect that organisation to conduct itself with the political impartiality of any other government sector.” This verges on the bizarre, given that by definition NGOs are not part of the “government sector”.</p>
<p>A third rationale now offered is that this condition will prevent abuses, such as the “<a href="http://www.couriermail.com.au/news/queensland/fake-tahitian-prince-joel-morehu-barlow-seeks-legal-aid-for-defence/story-e6freoof-1226410467322">Fake Tahitian Prince</a>” scandal, and funding of NGOs to pursue political agendas. But any concerns in these areas should be addressed by protocols common to all governments (and indeed other funding agencies) about proper, well-monitored use of funds.</p>
<p>The fourth rationale is that the government is seeking “health outcomes, not political outcomes or social engineering outcomes”. The government is entitled to seek health outcomes from activities that it funds: but that is no justification for gagging the non-government sector. </p>
<p>It is desperately depressing that any health minister should use pejorative phrases such as “social engineering” to describe the aims of health organisations, and, by implication, the aims of his own and other health departments around the country.</p>
<figure class="align-right ">
<img alt="" src="https://images.theconversation.com/files/15745/original/s6724syy-1348207243.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=237&fit=clip" srcset="https://images.theconversation.com/files/15745/original/s6724syy-1348207243.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=600&h=901&fit=crop&dpr=1 600w, https://images.theconversation.com/files/15745/original/s6724syy-1348207243.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=600&h=901&fit=crop&dpr=2 1200w, https://images.theconversation.com/files/15745/original/s6724syy-1348207243.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=600&h=901&fit=crop&dpr=3 1800w, https://images.theconversation.com/files/15745/original/s6724syy-1348207243.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=754&h=1133&fit=crop&dpr=1 754w, https://images.theconversation.com/files/15745/original/s6724syy-1348207243.jpg?ixlib=rb-1.1.0&q=30&auto=format&w=754&h=1133&fit=crop&dpr=2 1508w, https://images.theconversation.com/files/15745/original/s6724syy-1348207243.jpg?ixlib=rb-1.1.0&q=15&auto=format&w=754&h=1133&fit=crop&dpr=3 2262w" sizes="(min-width: 1466px) 754px, (max-width: 599px) 100vw, (min-width: 600px) 600px, 237px">
<figcaption>
<span class="caption">Queensland AMA president Alex Markwell has spoken out against the measures.</span>
<span class="attribution"><span class="source">AAP</span></span>
</figcaption>
</figure>
<p>No explanation has been offered as to why health, where advocacy has been so fundamental to our well-being over the years, is being singled out.</p>
<h2>Dark days</h2>
<p>The Queensland government’s approach has already met with some success. It has created a climate of fear. Beyond the AMA, whose Queensland president, Dr. Alex Markwell, has shown herself to be a true health leader, and some courageous public health academics, few in the state are willing to speak out, lest they be victimised and lose their funding.</p>
<p>These are dark days for public health in Queensland. The public health advocacy that has made our community so healthy will be hard to find. By contrast, commercial interests – in areas such as alcohol, tobacco, gambling, junk food, even firearms – are free to pressure governments at will.</p>
<p>Queensland, of all states, should have learned that gagging people in health from speaking out is a recipe for disaster. Censorship is the hallmark of a totalitarian regime; censorship in health sends out the signal loud and clear that the government neither understands public health nor cares for the future health of the community. </p>
<p>Other governments should condemn the Queensland approach though the Standing Council of Health Ministers; the Federal Government should bring all possible pressure to bear; and health professionals around the nation should use every available opportunity to make clear their distaste for this fundamentally unhealthy approach to public health.</p>
<p>Public health has been described as the conscience of the health system. It should be a matter of great concern for the entire community that any government is seeking to silence our conscience.</p><img src="https://counter.theconversation.com/content/9733/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Mike Daube has for many years been associated with a wide range of non-government, government and international health organisations.</span></em></p>Beyond the recent publicity around cuts to health and other portfolios, something deeply disturbing – even sinister – is occurring in Queensland. The state government is implementing health policies on…Mike Daube, Professor of Health Policy, Curtin UniversityLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/95482012-09-13T01:25:46Z2012-09-13T01:25:46ZQueensland coal: an accounting black hole<figure><img src="https://images.theconversation.com/files/15395/original/kxfc83c8-1347447099.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Given its parlous financial state, Queensland is within its rights to increase mining royalties. But why frame it as a surplus profits tax?</span> <span class="attribution"><span class="source">AAP</span></span></figcaption></figure><p>The Queensland Government has decided to raise coal mining royalties. Seems reasonable, doesn’t it? </p>
<p><a href="http://www.commissionofaudit.qld.gov.au/reports/interim-report.pdf">A review</a> of Queensland Pty Ltd by Peter Costello revealed a precarious balance sheet. Time to get things right, or at least moving in the right direction. Probably the word “responsible” needs to be inserted here too.</p>
<p>Part of that agenda is an evaluation of state costs and revenues. Part also is the evaluation of state assets and liabilities. Coal reserves are an asset, and the extraction of coal reserves generates a revenue. So it is hardly surprising that coal should feature in Queensland Treasurer Tim Nicholl’s new fiscal planning.</p>
<p>When the Treasurer said at his press conference that “Queenslanders own the resources in the ground here and are entitled to get a return on those resources”, he’s right.</p>
<p>The charges state governments make for the extraction of coal are called royalties. The term causes confusion, for it suggests they are charges made by the crown and hence they get conflated with the crown’s capacity to appropriate taxes. But royalties are not taxes. </p>
<p>Hancock Prospecting, the company at the core of Gina Reinhart’s corporate wealth, made its fortune charging royalties for the extraction of Hamersly iron ore. Royalties attach to the ownership of in situ reserves, and that ownership may or may not lie with the state.</p>
<p>So we need to think of coal reserves as a warehouse, and when you take commodities out of a warehouse, you diminish the asset base. There is appropriately a charge. The royalty is to be understood as a cost of production that must be paid along with the costs such as labour and freight. </p>
<p>It is inherently contentious how much of the cost of a tonne of extracted coal is to be called a cost of digging the stuff up, and how much of it the value of the stuff itself. </p>
<p>There is, accordingly, a debate to be had about dividing up the revenue of a tonne of coal, for each mine has different costs of production (difficulty of getting it out the ground, onto ships, and into the hands of end-users), mines can have different efficiency, and the coal itself can be of different qualities. </p>
<p>So how the revenue divides between profits, royalties, rent (for use of the surface land) and other costs is something of an arm wrestle.</p>
<p>But the in-situ reserves are finite, and the owner of those reserves can reasonably say that any tonne of coal can only be extracted once, and if the payment to the owner of the coal is not high enough, they might prefer to leave it in the warehouse (the ground) and sell it at another time.</p>
<p>So the Queensland Government is well within its rights to amend the price. BHP Billiton chairman Jac Nasser has described the coal royalty increases as “unbelievable” and “disappointing”. That’s as expected, for it comes off the bottom line of BHP coal mining profits. But he cannot contest the principle that there should be a reasonable price for access to in situ reserves, just as there should be for labour, equipment purchase and transportation.</p>
<p>But the puzzling thing is that the Queensland Government has framed its royalty policy to look like a surplus profits tax, and so it feeds the Nasser response. </p>
<p>The policy is to increase the rate for coal royalties to 12.5% on the value per tonne between $100 and $150 and to 15% thereafter. </p>
<p>But the rate for coal below $100 a tonne is not changing. According to the Treasurer <a href="http://www.brisbanetimes.com.au/queensland/coalfired-bid-to-get-budget-back-in-black-20120911-25pt4.html">Tim Nicholls</a>: “It is only when prices start climbing that the new higher rates will progressively apply, ensuring Queenslanders share in the upside of the value of their resources.”</p>
<p>So if the charge is a royalty, the government could reasonably say that every tonne of its in-situ reserves has a “reserve” price. But when there is one rate when the price of coal is low, and another when the price of coal is over a threshold, it looks like a different claim. </p>
<p>Either it is simply an exercise of <a href="http://www.investopedia.com/terms/m/marktomarket.asp">mark-to-market accounting</a> (that the value of coal reserves change directly with each movement with the price of coal) or it looks like the Queensland royalty policy is being framed more as a claim on profits, not a cost of production.</p>
<p>Conceptually, it’s a minefield.</p>
<p>Nonetheless, the Queensland government has a good case. Yet it never really plays itself out as just described. Not only is coal sold on long-term contracts, but there are jobs (and votes) at stake. The mines will never open and shut to secure a constant royalty, and no-one is arguing that they should!</p>
<p>Moreover, in the sphere of national politics, these theoretical niceties disappear. If it looks like a profit-related charge, the Feds will be onto it. They have a right to surplus profits tax, not the states. </p>
<p>So royalties are a cost of production, but it is virtually impossible for state governments to make them appear as such. They appear as a claim on revenue, not as a cost of production, and hence an incursion on the federal government’s domain.</p>
<p>The funny thing is that Gina Rinehart’s royalties do appear as a cost of production for mining companies, but somehow they became tied up in a debate about surplus profit taxes. </p>
<p>Perhaps the Queensland government has something to learn from Gina. Indeed, looking at the public sector sackings that are also part of the Queensland budget, is seems like they already have. It’s a frightening thought, but it will no doubt be on the mind of the Federal Treasurer as he determines his response.</p><img src="https://counter.theconversation.com/content/9548/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Dick Bryan receives funding from the Australian Research Council.</span></em></p>The Queensland Government has decided to raise coal mining royalties. Seems reasonable, doesn’t it? A review of Queensland Pty Ltd by Peter Costello revealed a precarious balance sheet. Time to get things…Dick Bryan, Professor, Department of Political Economy , University of SydneyLicensed as Creative Commons – attribution, no derivatives.tag:theconversation.com,2011:article/95072012-09-11T20:25:05Z2012-09-11T20:25:05ZQueensland budget commits to austerity<figure><img src="https://images.theconversation.com/files/15340/original/78zgxjt9-1347343916.jpg?ixlib=rb-1.1.0&q=45&auto=format&w=496&fit=clip" /><figcaption><span class="caption">Queensland Treasurer Tim Nicholls has delivered a budget that commits to austerity, with a return to surplus within three years.</span> </figcaption></figure><p>The 2012-13 Queensland budget was the most anticipated policy announcement in several decades.</p>
<p>The cut-backs in public sector employment previously forecast and cost saving measures announced in the early months of the new government foreshadowed further austerity.</p>
<p>The big question was whether the Newman Government cut-backs would affect front-line services and the roll-out of much needed infrastructure.</p>
<p>The Government has made clear the priority is to two medium-term objectives; to stabilise the recent blow-out in budget deficits; and begin the process of winding back state debt which in 2012-13 will reach $74 billion, rising to an $83 billion peak in 2015-16.</p>
<p>The Government believes that it can return the budget to surplus within three years and reduce liabilities to revenue from 130 to 112%. </p>
<p>This will be achieved with several new revenue measures including an increase in mining royalties and gambling taxes. However, a feature of this budget has been the balance that the Campbell Newman Government has struck between its short-term economic and social objectives. </p>
<p>Queenslanders will benefit from a freeze on government charges including public transport, energy and private vehicle registration fees, stamp duty on housing purchases and increased spending in health, education and the police. </p>
<p>The Government also announced increased spending on critical regional infrastructure including roads, ports and community facilities, it will boost funding for regional development the focus of which in recent years has been the southeast of the state.</p>
<p>Other important initiatives include increased spending on an upgrade of the Bruce Highway and support for the construction industry across a number of measures, including an increase in the first home buyer’s grant and a significant rise in funding for affordable housing.</p>
<p>The budget measure most likely to be the more controversial is the continued wind-back in state government employees with an $800 million provision for redundancies. This will impact regional centres although the Newman Government is predicting growth of 4% in gross state product in the coming year. </p>
<p>The growth estimate doesn’t tell the full story of the Queensland economy which is experiencing weaknesses in the tourism, retail, service and wholesale sectors and the shut-down of the smaller Queensland resources projects in the face of softening commodity prices.</p>
<p>The initiative most likely to impact the budget in the next 12 months will be the Commonwealth’s response to the increased mining royalties. The Commonwealth has threatened cut-backs in payments to the states that increase royalties. This is because of the impact on the mineral resource rent tax (MRRT) to the Commonwealth budget in 2013-14. </p>
<p>The Newman Government has increased royalties on coal producers subject to the MRRT and introduced a royalty payment structure referenced to the price of coal. The royalty payment is taken into account in the calculation of the MRRT and is unlikely to directly affect the mining companies future investment in new projects.</p>
<p>A further initiative of the budget is the Newman Government’s commitment to ease the regulatory burden on Queensland business by offering a collaborative approach to cutting red tape and reducing transaction costs.</p>
<p>The Newman Government’s first budget indicates that the LNP is willing to downsize government in the short-term to achieve a balanced budget and reduce state debt. </p>
<p>This Government has indicated for some months that this would be austerity budget. It believes that this is necessary if the state is to win back its AAA credit rating, reduce the cost of borrowings and raise private investment in capital-intensive sectors of the state economy.</p>
<p>The budget attempts to achieve this at the same time that it promotes regional development and delivers on its social agenda in areas such as indigenous welfare, reducing the waiting list for affordable and social housing and relief for householders feeling the effect of rising electricity charges in a State where there is a surplus of generating capacity. </p>
<p>The indications are that there will be significant economic and social reforms to follow.</p><img src="https://counter.theconversation.com/content/9507/count.gif" alt="The Conversation" width="1" height="1" />
<p class="fine-print"><em><span>Michael Regan does not work for, consult, own shares in or receive funding from any company or organisation that would benefit from this article, and has disclosed no relevant affiliations beyond their academic appointment.</span></em></p>The 2012-13 Queensland budget was the most anticipated policy announcement in several decades. The cut-backs in public sector employment previously forecast and cost saving measures announced in the early…Michael Regan, Professor of Infrastructure & Program Management, Institute of Sustainable Development and Architecture, Bond UniversityLicensed as Creative Commons – attribution, no derivatives.