Queensland is seeking billions of dollars work of asset sales to pay down debt and has trimmed infrastructure spending as it seeks to restore the state’s financial position.
Unveiling the 2014/15 State Budget on Tuesday, State Treasurer Tim Nichols confirmed plans to hive off up to $33.6 billion worth of state assets, including issuing long term leases on the Gladstone and Townsville Ports as well as the Mount Isa Rail Line; selling power and water companies Stanwell, CS Energy and SunWater Industrial Pipelines; and seeking private sector investment in electricity transmission and distribution businesses Powerlink, Energex and Ergon – albeit with no sales taking place prior to the next election in March.
Around $25 billion will be used to pay down debt whilst a further $8.6 billion will be put into an investment fund for infrastructure projects such as the new Underground Bus and Train tunnel project, new schools, and future disaster funding.
Overall, however, capital expenditure is set to fall from $9.753 billion in 2013/14 to $9.401 billion in 2014/15.
Major areas of investment include:
- Transport ($4.13 billion), including $377 million to continue construction of the Moreton Bay Rail Link and $177 million and $66 million to go toward the duplication of the Bruce Highway (Cooroy to Curra) Section A and $66 million to widen the Bruce Highway from two to four lanes between Vantassel Street and Cluden.
- Energy ($2.54 billion) , including $1.878 billion on distribution infrastructure
- Health ($1.559 billion), including almost $370 million for the Sunshine Coast University Hospital, $224.5 million to continue building the Lady Cilenty Children’s Hospital and $173.3 million for redevelopment of hospitals in Cairns, Mackay, Mount Isa, Townsville and Rockhampton
The asset sales come as the government tries to get the state’s financial position onto a more sustainable footing.
Although the fiscal deficit is set to fall from $6.083 billion to $2.271 billion this year and reach surplus by 2015/16, the state’s net debt is expected to grow from $69.031 billion in 2012/13 to more than $80 billion in 2015/16.
Construction industry groups cautiously welcomed the budget.
Master Builders Deputy Executive Director Paul Bidwell welcomed the asset sales program to the extend funds raised be used for infrastructure, but said the still needed reform of taxes such as stamp duty to boost the housing sector.
“What our industry desperately needs is a strong capital works program and other government measures that will increase demand for new construction and create a wave of investment and jobs,” Bidwell says.
“The budget delivers on this to some extent.”
But unions warn the privatisation of utilities could lead to further job cuts.
Around 150 workers from the Electrical Trades Union, which has been running a concerted campaign against privatisation, protested outside the executive building prior to the budget.
“The reality is, private companies will cut jobs, they’ll turn their back on regional communities in the name of profit,” ETU organiser Jason Young said at the rally according to an ABC report.