Campbell Newman’s public service cuts help keep state’s credit rating on track

• STEVEN WARDILL, JESSICA MARSZALEK, The Courier-Mail
• October 20, 2016 12:00am

FORMER premier Campbell Newman’s sacking of 14,000 public servant positions has helped Queensland retain its AA+ credit rating.

Ratings agency Standard & Poor’s yesterday credited curbs to expense growth and massive cuts to infrastructure funding for Queensland’s improved budgetary performance.

While acknowledging the Palaszczuk Government’s “Debt Action Plan”, the agency found reducing the public service wage bill had helped Queensland weather lacklustre growth caused by the mining decline.

“The Government achieved an operating surplus of about 8 per cent of operating revenues in 2015 after being in deficit by more than 3 per cent in 2013,” Standard & Poor’s said.

I’ll drink to that ... Campbell Newman has welcomed the findings. Pic: Jamie Hanson

“This improvement reflects the reduction of 14,000 fulltime equivalent positions in fiscal 2013, reducing employee expenses by 5 per cent in 2014, and conveyance duties and GST receipts rising substantially.”

Mr Newman yesterday welcomed the agency’s findings, saying many public servants now thank him for sacking them.

“What is often missed is that people were given generous severance packages and many people often thank me for giving them an opportunity to start a new business or new career,” he told The Courier-Mail.

The agency found Queensland could be on the path to reclaiming an AAA credit rating in two years if it could reduce debt and keep spending under control.

However, it warned the opposite could occur if debt increased and expenditure growth again got out of control.

The results come after the Palaszczuk Government hired 4100 more public servants than budgeted for in 2015-16 with a $1.3 billion spike in employee expenses offset by infrastructure spending cuts.

Treasurer Curtis Pitt said Labor’s disciplined approach to expenses was working. Pic: Jack Tran

Mr Newman said cutting staff was a difficult decision done in the interest of the state. “I really want to make it very clear that the objective was not to make people lose their jobs,” he said.

“The objective was to rein in irresponsible and unsustainable spending.

“There was a vital necessity for these things to be done and it disturbs me greatly to see the current government massively increase the head count and they clearly put this rating in jeopardy.”

However, Treasurer Curtis Pitt said the agency had acknowledged the Labor Government’s disciplined approach to expenses and debt action plan were working.

“It shows that we may well see an upgrade to our credit rating within the next two years and that is down to the hard work we have applied ourselves to over the past 18 months,” he said.

Mr Pitt said while the Newman government’s approach damaged the broader Queensland economy, Labor had managed to build services and kept assets while restoring the budget.

“And the result of that is we are seeing some fantastic commentary here,” he said.