The next Queensland Government can improve the state's economy by addressing five key issues that deal with debt, income and unemployment, a QUT economist says.
Dr David Willis, from QUT Business School, said a combination of refinancing debt, investing in infrastructure and training, establishing a state-based bank and recalculating royalties was a prudent and effective plan to boost Queensland's economy.
"We are in a position where the cost of debt is historically low and at the bottom of the cycle with 10-year government bonds yielding just 2 per cent last week," he said.
"There is a political need to control a deficit, so the Labor Government could start by looking at the present debt it has and refinancing at these cheaper rates. They should also push out the debt from short-term to longer-term, say 20 or 30 years.
"This will have the effect of cutting the deficit, or interest paid, and helping this and any future State Governments manage a surplus."
With debt refinanced and the cost of borrowing low, Dr Willis said the government's next move should be investment in an infrastructure portfolio, with a "concentration on rail, light rail and wider public transport."
"This sort of investment has always been an afterthought but it would build a portfolio of state-owned and run assets which is in total alignment with Labor's stance of building, not selling, assets.
"These projects would need the help of Federal and Local governments to agree on what is needed and share the funding load. But the benefits would be employment at a time of rising unemployment and a stimulus for the economy where it is most needed."
Dr Willis said as well as infrastructure, the government should invest in apprenticeships and TAFE to train and educate the future workforce and reduce youth unemployment across the state.
His fourth proposal is a state-based bank, run for the "advancement of Queensland."
"It would offer sustainable loans to farmers in regional Queensland, helping them invest in the land longer term," Dr Willis said.
"In addition this bank would be used for infrastructure spending across Queensland and should be funded at cheaper federal bond rates through the Reserve Bank of Australia. The bank, which could be run by a branch of Queensland Investment Corporation, would be a not-for-profit and would pass on this cheaper funding."
Dr Willis said mining royalties should also be revisited to find the best value for the state.
"Presently there is an income problem for the state with mining royalties falling short of expectations given the fall in commodity prices," he said.
"There needs to be a recalculation of royalties based on a percentage price, as it is now, and on a tonnage shipped so the miners or gas producers are paying whichever is greater at the time. This can give a floor under the royalty system that presently doesn't exist."
Dr Willis said the five ideas provided a "clear plan for the future of the state, be it rural, regional or city."
"They deal with debt, income, employment and state assets - all key issues that need to be addressed to secure the economic future of the state."
Media contact:
Rob Kidd, QUT Media, 07 3138 1841, rj.kidd@qut.edu.au
After hours, Rose Trapnell, 0407 585 901
