I mentioned back in June that one the first acts of the new Newman Queensland government was to employ former Liberal federal Treasurer Peter Costello to “audit the books”. I suggested at the time that it was difficult to verify much of the report as it was obviously political in nature and I can only assume was written with a “glass half empty” mindset.
The Courier Mail today has a piece covering responses to that audit:
Two separate reviews of the audit of Queensland state finances led by former federal treasurer Peter Costello have concluded the report was neither independent nor an “audit” as such.
An examination of the Costello document by University of Sydney’s Professor Bob Walker argues that it simply follows a very familiar and politicised theme: “The incoming government had inherited a financial crisis. The financial cupboard was bare. There was a high level of debt. There was a need to cut a range of programs and reduce the size of the public sector.”
The Walker analysis, funded by the Queensland Council of Unions, is backed up by University of Queensland economist John Quiggin, who will today publish his own independent critique of the document.
Both analyses conclude that the Costello report focuses almost exclusively on the liabilities side of the Queensland balance sheet while understating assets, at the same time as shifting the goalposts when it comes to accounting standards to inflate the size of the problem.
Professor Walker’s report to be handed down by QCU president John Battams this morning says “for the purpose of presenting alarming figures about debt”, the audit report disregards the $28 billion in assets held by Queensland Treasury Corporation.
I’m not really sure this is a surprise to anyone, it certainly wasn’t to me. But as I stated earlier this week
.. coal is under pressure , the housing market remains in the doldrums and private sector credit growth is at 35 year lows.
If these factors persist, and I see little reason at this point to suggest they will not, then all government budgets are going to come under pressure in this FY. I not sure how using rubbery figures helps anyone. The Qld budget will be delivered next Tuesday.
The full review from John Quiggin is below.