Another idiot politician taking the easy way to raise revenue to pay debt- sell state assets. Those assets already provide a steady income and are sold on a price earnings ratio- so if they earn $1b it might sell for a multiple of 10 which is a sale price of $10b. In private hands they reduce upkeep increase prices and quickly increase profits to say $3b. Then at a multiple of 10 refloat part to the public valuing the asset at $30b. For years I have strongly opposed the sale if state assets. I have observed bankers keen on loaning money to governments to pay for the politicians bribe giveaways that gets them into power. Then no sooner they are in office the bankers money end of town lobbyists start encouraging them to them via them the state owned assets. I see it year fatter year country after country and it always results in power government and inflation. This article from the Australian re Queensland . QUEENSLAND Premier Campbell Newman is hoping voters will buy into his plan to raise $33 billion from port and power assets to pay down debt and fund infrastructure, in a pre-election budget underpinned by blue-sky projections of soaring growth and future surpluses. In the last budget of the Newman government’s first term, Treasurer Tim Nicholls declared yesterday that the Liberal National Party had kept its promise to return to surplus — with a slender operating surplus of $188 million in 2014-15. However, the underlying fiscal balance is forecast to be a $2.2bn deficit before a surplus of $862m the following year. With coal-seam gas about to begin production and predictions of a rebound in worldwide coal prices, growth is forecast to double from current levels to 6 per cent in 2015-16 — twice that of the other states — and usher in a new era of prosperity for Queensland. While taxes and levies were not raised, Mr Nicholls blamed the federal government for forcing Queensland to pass on cuts to concessions and admitted the Abbott government’s recent budget cuts had yet to be absorbed into the state’s bottom line. The centrepiece of the budget was the unveiling of the long-awaited plan — to be taken to the next election, due early next year — for state assets to be put up for sale, lease or private investment. The ambitious plan, which includes an Australian-first call for private investment in the state’s electricity “poles and wires’’ distributors in return for a share of future profits, is intended to pay down $25bn in debt and fund $8.6bn in infrastructure. The government wants to sell power generators Stanwell and CS Energy and a regional water pipeline, lease the ports of Gladstone and Townsville and Mount Isa Rail Line, and open up to investors the power transmission corporation Powerlink and distributors Energex and Ergon. Mr Nicholls said he expected public opposition to the sell-off, led by the unions. “But at least Queenslanders now know we will have funding certainty into the future, so we can invest in things we need for a growing and ageing population,” he said. He said 75 per cent of the money raised would help pay down state debt, set to rise to $80bn in 2016-17, and cut annual interest payments by about $1bn — almost equal to the dividends paid every year by the assets. The Abbott government is also expected to hand over $1bn in incentive payments under a federal budget initiative to boost infrastructure spending. The sales plan — to be rolled out over six years — is the second stage of the government’s response to the 2012 commission of audit, led by Peter Costello, which warned that the state’s finances were no longer sustainable. In the first stage, the government cut programs and sacked 14,000 public servants which, according to yesterday’s budget, had saved more than $7bn in recurring expenditure between 2012 and 2016. Mr Nicholls said scoping studies last year gave him confidence there was demand for the asset sales, with some of the proceeds to be poured into a network of future funds including a $1.5bn southeast Queensland roads fund and a $1bn school fund. “It is not a budget of big headlines or irresponsible spending sprees; it is a budget that is right for the times,” he said. While the budget forecasts banked on the state’s new LNG industry, Queensland will remain heavily dependant on old-world coal for years to come. The budget papers detail an accelerated return to the heady days of Queensland’s coal boom “supported by steady growth in export volumes, a gradual recovery in coal prices and a depreciating exchange rate”, none of which is guaranteed. Treasury conceded such forecasts were extremely volatile. The coal turnaround is crucial to the budget bottom line — coal royalties are tipped to rise from $2.078bn next year to $3.315bn in 2017-18, whereas LNG, in comparison, will go from a starting base of $199m to $636m over the same period. The biggest hit to the budget will come in the form of Abbott government cuts to health spending, in particular, and other critical service delivery areas, mostly from 2017-18. Labor attacked the government’s asset sale plan despite the Bligh government off-loading rail, forestry and ports in 2009. Opposition spokesman Curtis Pitt said Labor would prefer to grow the economy to pay down debt. “This government is all about a plan they had from the start to sell assets, not a plan to create a stronger community in Queensland,” Mr Pitt said.
Posted on: Tue, 03 Jun 2014 22:57:14 +0000
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