Academics Slam Flawed Treasury Advice On Asset Sell-off

Academics Slam Flawed Treasury Advice on Asset Sell-off

19 November 2009

**EMBARGOED UNTIL 5:30AM, 19/11/09**

An independent academic review has slammed the advice provided by Treasury to justify the State Government's asset sell-off and claims the decision to sell public assets was "bad and unnecessary".

The Queensland Council of Unions commissioned Professor Bob Walker and Dr Betty Con Walker (credentials following) to analyse the Bligh Government's reasons for its privatisation proposals with the final report "Queensland Asset Sell Offs, Budget Black Holes, Borrowings and Credit Ratings" to be released today. Professor Walker participated in the Bernie Fraser-facilitated talks in October this year between unions and Queensland Treasury.

The paper contains claims made by government about the impact of the global financial crisis on Queensland's finances with the report stating that none of the claims could be taken seriously and that some had featured inconsistency and exaggeration. Some of the claims which have been debunked in the report are that:

- the proceeds of the sale will both fund new infrastructure and repay debt
- a reduction in forecast revenues became a budget black hole of $15 billion (up from $4 billion, then $14 billion, then $15 billion)
- the retention of public assets will require $12 billion in capital investments
- the sell-off will save $750 million every year in interest payments (or is it $1.8 billion?)
- the downgrading of the credit rating will immediately cost $200 million annually

QCU General Secretary Ron Monaghan said the report justified the union campaign against the proposed asset sales and that he would be writing to the Treasurer seeking a detailed response to the report.

"This report states very clearly that the government's decision is short-sighted and would potentially cost future generations billions of dollars in lost revenue and earnings potential.

"The report highlights the fact that Queensland stands to reap enormous benefits from the demand for its natural resources in years to come with signs of a revitalised resources boom occurring now.

"Treasury's own forecasts show that coal rail will make Queensland more than half a billion dollars in 2012/2013 how can the government justify selling-off a public asset that is helping to build our state's future?"

Mr Monaghan said that the government had used the flawed Treasury figures to justify its privatisation proposal but the time had come to put an end to the sell-off.

"Australia has done better than most to avoid the worst of the financial crisis and Queensland's exports are up a record $21 billion in one year. Plus, our budget is now $34 million in the black rather than the estimated deficit of $1.573 billion. How could Treasury get this so wrong?

"The government's flimsy arguments for privatisation have been blown out of the water now by this report. They need to reverse this decision and restore certainty to those workers who have the threat of privatisation hanging over their heads."

The report will be released by Professor Walker and Ron Monaghan on Thursday 19 November at 11:00am, Level 5, TLC Building, 16 Peel, St, South Brisbane.

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Prof. Bob Walker BCom (NSW) MEc (Sydney) PhD (Sydney) FCA
Bob Walker is a Professor of Accounting at the University of Sydney. He is the author or joint author of six books and monographs and more than 60 articles in academic or professional journals or chapters in books. His specialist interests include public sector finances, corporate regulation, and corporate governance. In parallel with academic activities, Bob Walker's professional involvements and community activities include serving for six years as the chairman or deputy chairman of the Australian Shareholders' Association. He was a foundation member of the Accounting Standards Review Board. He has served as a consultant to a range of organisations in the public and private sectors. Public sector consultancies include the National Companies and Securities Commission, the Australian Securities Commission, the Australian Stock Exchange, Treasury Departments in NSW and the Northern Territory, and Public Accounts Committees in NSW, Victoria and the Northern Territory. Many of his activities have involved working with government in policy development. His work with the NCSC led to the most fundamental change in the regulation of corporate disclosure requirements since the 1940s. He was a member of the Companies and Securities Advisory Committee to the Commonwealth Attorney-General, and a member of the advisory committee to the Commonwealth Auditor-General. From 1995-99 he served as Chairman of the NSW Council on the Cost of Government, a standing `commission of audit' appointed by the NSW Government to review state finances and develop proposals for reform. In that capacity he reported directly to the Premier and the NSW Parliament. From 1993-97 he served as a director of a Commonwealth statutory authority, and from 1999-2007 as chairman of a NSW state owned corporation, Pillar Administration.

Dr Betty Con Walker BEc (Sydney) Dip Ed (Sydney) PhD (Sydney)
Betty Con Walker is an economist with experience in both the private and public sectors. She worked at CSR Ltd (during which she was nominated for the `Business Woman of the Year Award', and taught part-time at the University of Sydney). She has served on various government advisory agencies. They included the Centennial Park Board of Advice to the NSW Premier, the Australian Council on Population and Ethnic Affairs chaired by the Minister for Immigration and Ethnic Affairs, the National Committee on Discrimination in Employment and Occupation reporting first to the Federal Industrial Relations Minister and then to the Attorney-General, and the Australian Institute of Multicultural Affairs reporting to the Minister for Immigration and Ethnic Affairs. She then joined the NSW Premier's Department followed by the NSW Treasury. She has worked with various governments on policy and legislative development, and the preparation of NSW State Budgets. Her employment in government included four years as a financial adviser and spokeswoman for a former NSW Premier and Treasurer. She then set up Centennial Consultancy which provides advice to government and various industries including the education, finance, health, hotel, resources, and retail sectors. Her publications include joint authorship with Prof Bob Walker of Privatisation: Sell off or sell out? (published by the Australian Broadcasting Commission, 2000, reissued in 2006, and republished with a New Introduction by Sydney University Press in 2008). Her most recent book Casino Clubs NSW: Profits, tax, sport and politics (Sydney University Press) was published in October 2009.

SOURCE: Queensland Council of Unions