MAJOR CHALLENGE FOR GOVERNMENT IN QUEENSLAND

A report commissioned by Commerce Queensland has revealed the Queensland Government faces a serious deterioration in its Budget position over the next few years unless it draws on the strengths of the private sector.

Released today, the report The Role of Government in Queensland by respected economist Des Moore, presents the policy approach needed to achieve improvements in service delivery, economic growth and community confidence.

Commerce Queensland President, Beatrice Booth said the conclusions drawn in the report indicate State Government would benefit by accepting the major challenge of developing a larger role for the private sector in Queensland, which would, in turn, help the Government overcome the seriously deteriorating budgetary outlook revealed in the report.

“If the Government takes the lead in Australia by making Queensland the state renowned for being the most attractive to private investors, it would also have considerable potential for improving the economic and social positions of the wider Queensland community,” Mrs Booth said.

The private sector already provides a high proportion of services such as health and education, including almost half of hospital services and over 30 per cent of school services.  Queenslanders have responded to the greater efficiency and higher quality delivery of the sector, and there is scope for a substantial increase in the proportion of ‘traditional’ Government services provided by the private sector.

A shift towards private sector provision of such services would lead to a reduced need for government expenditure and a reduction in taxes.

The report points out that over a period, taxes could be reduced by $1,000-1500 million - about 15-20 per cent of existing state taxation, enhancing Queensland’s reputation as a low tax state.

Mrs Booth also said that Commerce Queensland endorsed the report’s thesis that the increased provision of services through a more competitive framework would benefit Queensland consumers of those services and provide users with the wider choice, which educated societies are increasingly wanting.

“All too often the Queensland Government claims that existing federal-state relationships prevent it from implementing reforms. However, as the report indicates, there is much that can be done within existing arrangements,” she said.

Commerce Queensland will continue to carefully monitor developments in those areas emerging from the report as opportunities for savings.

Commerce Queensland commends for the Government’s serious consideration the following main opportunities that emerge from the report.

• Adoption of the purchaser/provider model recommended by the 1996 Audit Commission, including contracting out the deliveries of an increasing proportion of existing government services;


• A major program of lower taxes financed by savings from an enhanced private sector role in providing services and by reducing less critical expenditures such as concessional electricity tariffs and petroleum subsidies and allocations for ‘general public services’ which are well above the all-states’ average;
  
• There would be further savings from reducing the number of departments, by amalgamating those with similar functions, and by minimizing duplication and inefficiencies such as those resulting from the government printer, centralised public works maintenance; and by limiting the growth over five years in the number and average earnings of public service employees. Some of these changes would also encourage business investment to Queensland;
  
• A liberalisation of policies towards, including a faster increase in state grants; making low interest loans available for capital expenditure; giving ready accreditation to new applicants; changing regulations to require only minimal curricula and to allow new schools to compete without taking account of other schools in the area; allowing ‘for profit’ schools where profits are expendable only on the school; giving non-government school groups preference in areas where new schools are needed; rationalising the large number of under-utilised/under-sized government schools, with non-government schools invited to be part of the rationalisation process; and announcing no further reductions to existing average student/teacher ratios in government schools;
  
• A liberalisation of policies towards private hospitals, including support for a further large expansion in private hospitals and more positive action to fulfill the statement in 2004 of a preparedness to establish a more cooperative relationship with such hospitals; an indication that a further reduction in public hospitals is anticipated; the establishment of a normal waiting time of 12 months for private (insured) patients wanting treatment in public hospitals even though they could readily be treated in private hospitals; and the offer of low interest loans to help fund the expansion of private hospitals or the establishment of new ones;
  
• A clarification of policies on the private sector’s role in ‘public’ investment, including that public-private partnerships and/or contracting out will be used wherever practicable and efficient and that most of the $22 billion of public corporation assets will be sold;
  
• A major program of reduced regulation of businesses, including a revamped “Review of Hot Spots for Regulatory Reform”.
  
• An inquiry into establishing an upper house as a house of review with improved accountability testing of government provision of services.