Costello's report 'tainted': Pitt

THE Newman Government is using worst case scenario financial projections to justify cutting jobs and spending, according to the Queensland opposition.

Spokesman for Treasury Curtis Pitt said the report from the Commission of Audit, chaired by the Coalition's former Federal Treasurer Peter Costello was tainted by politics.

Mr Pitt said the Queensland Government's goal of trying to return to surplus in the 2014-15 financial year was identical to the one outlined in the mid-year review released by the former Bligh Government in January.

Only hours before, Mr Nicholls and Mr Costello outlined that the previous government had used wildly optimistic projections to justify its financial position.

Mr Pitt said this government was using figures that would include a repeat of the Global Financial Crisis plus the once-in-a-lifetime flood event that hit the state in 2011.

"Their claims about a debt position six years into the future are based solely on a set of assumptions created by Mr Costello," Mr Pitt said.

"Of course a former Liberal Party politician would say it's all Labor's fault."

The Queensland Opposition were given the audit report on Friday morning, after it was released to the press.

He said the ALP would review it further over coming days.


Nicholls says no to asset sales

TREASURER Tim Nicholls has ruled out selling Queensland assets before the 2015 election, after an independent report recommended the plan to ease the state's catastrophic financial position.

He said such a move would require a mandate from voters.

The concept is suggested in the first report from the Independent Commission of Audit, a group announced by Premier Campbell Newman in the first days of the new government and chaired by former Federal Treasurer Peter Costello.

In between analogies that likened the state's economy to a patient in critical condition, Mr Nicholls and Mr Costello painted the former Labor Government as having wastefully splashed around cash while hiding behind overly-optimistic economic forecasts.

According to the report, the state's apparent deficit as described by Labor for this financial year was $1.8 billion, when it was found to be closer to $6.6 billion.

That figure is expected to increase to $9.5 billion in the 2012-13 financial year, with the government saying the debt will only worsen if hard decisions cannot be made.

Mr Costello said the state must first cut spending before considering "radical surgery" in the form of selling off assets.

"If Queensland wants to get back to its AAA credit rating, it won't be able to do it through taxes and expenditure reductions alone. It just cannot be done," Mr Costello said.

"It will have to retire a pallet-load of debt and that will mean utilising the proceeds of assets."

Mr Nicholls said all options were under consideration to raise more money for the state, with the exception of a $100 state-wide debt-reduction levy.

Still on the table were land taxes, gambling taxes, higher transfer charges for real estate transactions or upping royalty charges on mining companies.

In order to save a state budget at death's door, the state is expected to announce large-scale public sector jobs going under the knife when it delivers its budget in September.


Debt paid Labor's bills: audit

HEAPED doses of bitter medicine are expected to be forced down the throats of Queenslanders as the Newman Government sifts through the economic wreckage left by its predecessors.

In an interim report today, the LNP Government revealed it would consider increasing taxes on land, gambling and mining companies as it rushes to halt the erosion of the state's credit rating.

A $100 levy on landholders was considered an option, but was ruled out by the Treasurer.

The Independent Commission of Audit's Interim Report, announced in the first days of Premier Campbell Newman's government, found the state debt could hit $100 billion by the 2018-19 financial year.

Treasurer Tim Nicholls said he was astonished by the extent of the damage.

"We knew the financial mess left by Labor was bad, but this mess is beyond all expectations," Mr Nicholls said.

"Unfortunately for the people of Queensland, the full extent of Labor's wreckage is there in black and white."

Mr Nicholls pinpointed the years before the Global Financial Crisis, in 2006, where the former Labor Government when borrowing began dramatically outpacing the amount the government was earning.

More to come.

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