Aug 1, 2012

Quiggin: Qld isn’t Greece or Spain — acting like it could hurt

Campbell Newman’s hyperbolic claims that Queensland is on the verge of becoming the "Spain of Australia" have been rightly derided. So how do the books really look?

Campbell Newman’s hyperbolic claims that Queensland is on the verge of becoming the “Spain of Australia”, is on a “slide into bankruptcy” and about to execute a “power dive into the abyss” have been rightly derided. Queensland has a strongly growing economy, unemployment rates at near 40-year lows and a budget that is close to balance, and likely to return to surplus, even without drastic cuts.

Credit ratings agencies are overrated, but they are paid to estimate the likelihood that a given bond will go into default as a result of corporate or state bankruptcy. Despite some egregious failures, they are more often right than wrong. The comparison between Queensland’s AA+ ranking (the same as that of US Treasury bonds) and Spain’s BB- speaks for itself.

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13 thoughts on “Quiggin: Qld isn’t Greece or Spain — acting like it could hurt

  1. zut alors

    Newman is a simple man with simpleton solutions.

  2. John Bennetts

    This same article, edited to replace the word “Newman” with the word “Abbott”, will be true in 18 months in the federal arena.

  3. klewso

    Simple – When it really isn’t in that bad a shape :- “Talking it down makes turning it round an even greater “feet”.”

  4. Finoosa

    Thank you for excellent analysis and for giving us a fact based view
    of Queensland’s financial position. I had tried to source figures myself but
    found this very difficult. This is exactly the kind of information I was
    looking for and I also appreciate the historical context at the end of the article – th
    transition from low tax low services state to low tax higher level services state
    and the failure of governments to address the revenue shortfall.

  5. Gavin Moodie

    The mayor of Queensland should reverse that great public policy vandalism perpetrated by his predecessor Bjelke-Petersen and join the rest of the OECD in introducing probate duty.

  6. Bill Hilliger

    To envisage the LNP and honesty is akin to seeing North Korea a humanitarian democracy.

    Campbell Newman will rank as an amateur compared to when Tony (the accomplished l-i-a-r) gets into office.

    According to the polls the Australian people just want to be shat on by the coalition government in waiting – they want Tony.

  7. Dogs breakfast

    Fine work as usual Prof Quiggin. Nothing less expected from such an eminent source.

    With so few journalists able to count past 10, a knowledgeable article such as this at least informs those who seek to be informed.

    Those few, those very few.

  8. Paddy Forsayeth

    My missus (in the publis service) said that Costello’s report was inaccurate. Thanks to teprof. her opinion seems to be confirmed. I am of the opinion that the doings of newman are tis the vindictiveness of the NP part of the LNP. I agree with Bill…Newman is the first act of a very nasty play.

  9. Scott Grant

    So Peter Costello headed the commission and came up with a (Prof Quiggin’s word) ‘silly’ set of recommendations. What a surprise! (NOT!)

    I am repeatedly astonished at the vastly over-rated reputation he has with conservatives.

  10. Bill Hilliger

    @Scott Grant: with regard to the Costello over-rated reputation with the conservatives. The conservatives look up to and admire those who almost achieved mediocraty, at best Costello was only ever a fair weather treasurer. The reason why post leaving politics the fellow never managed to snare a worthwhile and respectable post in the business world.

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