Here we Joh again! LNP's Strong Choices to hit families hard

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The LNP’s plan to privatise assets will have a major debilitating impact upon Queensland families’ household budgets. Steve Bishop does the sums.


Elementary mathematics, using official figures, reveals that every Queensland family will face extra taxes and charges averaging more than $1,000 each and every year if the LNP wins this month's Queensland election.

This is because an LNP government will lose income of more than $1 billion a year from the hugely-profitable, publicly-owned assets it plans to privatise.

Last year, that income was $1.586 billion — equivalent to extra taxes and charges averaging $1,381 for Queensland’s 1,148,175 families.

Here's how you can check the maths for yourself.

The LNP has said that, if it wins government, it will privatise the hugely profitable power companies of Ergon Energy, Energex and Powerlink, and the ports of Gladstone and Townsville.

These government enterprises pay the Queensland Government dividends on their profits and the equivalent of income tax.

In its annual report for 2014, Ergon Energy reported dividends payable to the Government of $392 million (page 4) and tax equivalent of $181 million (p32).

The figures for Energex, according to its report, were $406 million (p3) and $215 million (p3) and for Powerlink $168 million (p11) and $91 million (p8).

Gladstone Port paid $25 million and $57 million (p61) and Townsville Port $16 million and $15 million (p38).

That all adds up to $1,586,000,000.

The Government acknowledged the loss of this income in its Strong Choices PR campaign, saying on page 36 of its plan:

It is important to acknowledge the potential loss of income, in the form of dividends the Government currently receives from its Government Owned Corporations (GOCs). In addition, the GOCs pay income tax to Queensland.

If the Queensland Government leases these businesses it would not continue receiving this revenue.

This revenue goes straight into the Government coffers to help pay for education, health and all the other services (see table 3.1).

In order to balance the books and not cut services or sack hundreds of public servants, the Government will have to find another way of generating more than a billion dollars a year.

The LNP says it

'... will not introduce any new taxes and will provide more payroll tax relief for businesses.'

The Newman Government explained in its Strong Choices propaganda campaign:

As a State Government we only have the capacity to raise funds from a relatively small number of narrowly based taxes. These include: 

  • State taxes, such as land tax and payroll tax
  • Revenue from the sale of goods and services
  • Royalties from the mining of mineral resources

Rather than increase the tax on payrolls, the Government has promised to reduce exemptions, resulting in a further hole in the income stream.

And it has strongly opposed increased taxes on mining.

It could increase gambling taxes, but it said in Strong Choices:

In the 2012-13 Budget, the Government added an additional tier to gaming machine taxes and secured additional casino revenue. Increases in gaming taxes will affect the competitiveness and viability of operators including pubs, clubs and the leisure sector. Alternatively, it will be borne by players through lower prize returns.

The Government is chasing a casino-led recovery, so it is unlikely to make any changes there.

That leaves the taxes and charges it outlined in its Strong Choices questionnaire, which will hit families hard.

The 2011 Census reveals there are 1,148,175 families in Queensland. Divide the $1,586,000,000 in lost income by 1,148,175 and the shortfall for every family is $1,381.

The Government told people that the taxes it could raise were limited to:

  • duty on first home owners;
  • transfer duty on people moving home;
  • increase duty on all properties;
  • introduce land tax on all properties in Queensland;
  • increase land tax on all existing properties under existing rules;
  • increase motor vehicle registration;
  • increase insurance duty which would increase premiums for cars and homes, and other types of insurance such as workers compensation and medical indemnity; and
  • increase the Emergency Management, Fire and Rescue Levy.

In addition, it could remove all Government public transport concessions, which would dramatically increase commuting fares.

As I have reported previously, the LNP’s Mark McArdle gave this example on 4BC:

If we…try to quarantine the dividends from energy it means public transport subsidies are going to fall away and ratchet up massive price rises in relation to public transport.

For example, if we hadn’t lowered the cost of transport to travel from Redcliffe to Brisbane the increased cost would be $850 per annum.

That example of an increase of $850 a year on a commuting fare is the result of losing the income from the power companies. With the loss of income from the ports, the increase would be closer to $1,000.

I have twice asked Premier Newman about the extra taxes and charges which will be imposed on families, quoting the amount of income that will be lost from the power companies and asking him most recently, on January 14:

'How can a government that says it wants to cut the cost of living take this action?'

The reply I received from his office did not address the question, but did, ironically, include this line:

'Queenslanders overwhelmingly told the government that they did not want to pay more taxes.'

They may not want to but a one-seat majority for the LNP will cost each Queensland family dearly.

You can read more by Steve Bishop at stevebishop.net.

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