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THE WORKERS AUDITA document by angry workers, for angry workers to debunk some audit

commission myths.

Is Qld $100 billion in debt?

No.

That is the projected borrowing gure for 2018-19that the Queensland Commission of Audit (QCA)came up with, based on their views of the last10 years of spending by the Labor Government(Initial Report, p3). It neglects to say that for most

of this period, the government was in surplus andexperienced a revenue and population surge thatboth required, and allowed for, funding for capitalworks.

The actual fgures are:

The state, as of the 2010-11 nancial year, has anet worth of $171,211 billion and a debt of $41.018billion (p26)

The QCA has changed the way that QLDGovernment debt is measured, from a operatingbalance method to a scal balance. This changehas allowed the QCA to exaggerate the level ofdebt. The operating balance of the government in2010-2011 was a small decit of $1.5 billion, butthe QCAs scal measure changes this gure to adecit of $7 billion (p29).

An operating balance is the difference betweenincome and expenditure: think about thedifference between your income and how muchyou spend in the same year. A scal balance isthe operating balance plus the cash needed forfuture expenditure. Under this measurement notonly QLD but Vic, NSW and WA are also in decit(p30). -The forward estimates compiled by treasurybefore the election show an operating balance insurplus and a much smaller scal decit by 2015-16 if things continued as they were (p35).

Are Public Servants being paid withborrowed money?

Although the public service grew at a higher ratethan population growth, this is because QLD wasso far behind compared to other states. Thegrowth in public sector employment was focusedin health, communities and police, with targets of85% frontline staff in Health, for example. QLD

public sector wages are still 97.4% of the nationalaverage and have grown slower than private sectorwages since 2008 (for these gures and a morein-depth look at Qld public sector wage growth see

Introducing the Qld Treasurer http://blogs.crikey.

com.au/pollytics/). The QCA Interim Reportstatesmuch of the increase in stafng numbers wasdirected at front-line services (p8). These include,according to the Interim Report; child safety,hospital beds, higher wages for doctors, nursesand clinical staff, public transport infrastructure,

disability services and the introduction of a prepyear (p7). Far from being waste, each of theseare essential services. Public sector wages havenot ballooned or caused the debt; increases inexpenditure have been directed at crucial frontlineservices rather than a larger bureaucracy.

So what caused the debt?

The LNP Government regularly claims that the debtis due to too many public servants and high publicservant wages. The QCA in the Interim Reportclaims that the cause was the ill-discipline of theprevious ALP government (p10). But the reportcontradicts itself. Earlier it grudgingly admits thatthe state was vulnerable and exposed to adverseshock, including the nancial crisis of 2008 and thenatural disasters of 2011(p7). Whilst the InterimReporttries to lay the blame of this risk to stateexpenditure, Treasury tells a different story.

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WorkersAudit

The 2007-08 Budgetshows how with the Qldeconomy growing at 5% a year at that time, thegovernment was able to return an operating surplusof $268 million whilst investing in health care andwater supplies and other capital works. With thenancial crisis this changed, and the 2008-09 Budgetreveals that the state government through theQueensland Investment Corporation invested $27

billion in nancial markets to fund future employeeand other obligations. The government expected areturn of the 7% but due to the nancial crisis insteadreceived 2% - this produced a decit of $995 million(p3). The nancial crisis has continued to impact onthe state government revenue. The 2009-10 Budgetreveals that revenue dropped due to lower taxationrevenue, decreased coal royalties, and lest GSTrevenue given from the Federal Government (p44).This continued in 2010-11, and 2011-12 with thenatural disasters making the condition even worse.

Rating Agencies are not our friends

What exacerbates this situation is the power of ratingagencies. These are private bodies that evaluate anentitys ability to service its debt. The rating that anentity gets affects what interest rate it can borrowat. In 2009 Standard and Poors downgraded Qldsdebt from AAA to AA+. It is the express purpose ofthe QCA (in fact its rst stated goal), to enact policysettings and strategies to address any structuralfactors affecting the States nances, and to restore

its AAA credit rating(p205). Ratings agenciesdo have a lot of power, but lets not accept theirinfallibility. Standard and Poors were instrumental ingiving AAA+ ratings to the institutions that traded inCertied Debt Obligations and collapsed during thenancial crisis (the Qld Government now uses therating agency Fitchs).

So, what can we blame Labor for?

We can blame Labor for participation in nancialmarkets as a means of increasing revenue: Qld had

been investing funds with the ongoing expectation ofmaking prot as an alternative to increasing companyand other taxes. This reliance on the nancial systemas an income stream left the stat open to a budgetdecit as a result of the nancial crisis.They increased the size of the public service byusing temps: it was perfectly correct to increase thenumber of public sector workers as the population ofQueensland grew, but hiring those workers without

job security left them vulnerable to sackings once achange of government occurred.

Neoliberalism:

And what does the QCA recommend? The InitialReportsuggests two stages in its strategy. The rstis the capping of growth in employee expenses at3% (p191)- and this means jobs cuts and in effectwage rises lower than ination and cost of livingincreases in other words a pay cut. It is the second

stage that is really worrying. Here, the governmentplans to reduce debt to revenue ratio to that of 60%(p180). It plans to do this by a combination of assetsales (p15) and restricting the use of public healthand education to only those that need it most(p203).While the language sounds altruistic, what this meansis that the QCA recommends the government onlyprovide health and education in circumstances whereno other provider exists(p203). This is an agendaof massive privatisation, of a state that increasesan onerous burden of work on its employees, thatsells off more assets and pulls away the provision

of services to the majority of people and onethat focuses on the sustainability of the Statescapital program (p205) which reading through thelines we can understand as building and maintaininfrastructure for the benet of mining interests.

So we have a manageable decit, caused bynancing much-needed services through investing inglobal nancial markets rather than by raising taxes.With the nancial crisis, the state was left with a debtthat was made worse by natural disaster. Now, the

LNP government exaggerates that debt to enact anagenda of privatisation and austerity. This will pleasebanks and mining companies stand to gain too. Butwe all lose. We have to work together to refuse to payfor their imaginary crisis. We need to insist that ourlives are more important than balance sheets, and todefend social solidarity and dignity.This was leaet written by a group of annoyedworkers, based on ofcial documents from the QLDCommission of Audit and Treasury.

For updates email:

workersaudit12@gmail.com