Queensland election could hinge on economic woes

Queensland Premier Anna Bligh has called an early state election, just three days after the state lost its AAA credit rating because of its rising debt levels.


The poll, to be held on 21 March, is likely to hinge on the prospects for the Queensland economy. Queensland, which was portraying itself as the engine room of Australia just two years ago, is suddenly slowing sharply.

Economic growth is set to fall from 5.1% in 2007-08 to around 1% in 2009-10, and unemployment is expected to rise from below 4% two years ago to around 6.25% in 2009-10.

To combat rising job losses – and cope with the state’s recent population boom – Bligh has decided to push ahead with infrastructure projects. But this will result in budget deficits of $11 billion over the next four years.

Bligh defended her decision to keep spending after calling the poll yesterday.

“We need a Queensland Government to have a clear mandate to chart through the economic crisis that is engulfing the world.”

Bligh’s opponent is Lawrence Springborg, who recently led the merger of the Queensland Liberal and National parties to form the Liberal National Party.

The LNP needs a giant swing of 8.3% to win the 22 seats it needs to govern in its own right, but Springborg has come out fighting, claiming Bligh is “running scared”.

“It is a sad legacy of economic management and mismanagement of Labor Government that after 11 years of the rivers of gold, our state is broke.”

Springborg has already made a clear pitch for business voters by declaring he would lift payroll tax thresholds to help protect jobs.

Under the LNP plan, businesses with a turnover of $1 million to $5 million who do not sack workers during the downturn would receive a 10% increase in their payroll tax threshold, paid in the form of a rebate at the end of the financial year.

Springborg claims this would allow these businesses to employ two extra people without paying any additional payroll tax.

The president of the Queensland Chamber of Commerce & Industry Queensland, Beatrice Booth, claims both parties must prioritise economic management.

“The level of economic activity and demand is perhaps the most crucial issue as we head toward the state election. The business community wants the next state government to sure up business confidence and, in turn, the economy.

“Businesses want a competitive operating environment that delivers the ability to employ, and that will provide an overall robust level of economic activity.”

Of course, both parties may struggle to keep promises of big tax cuts, given the big budget deficits and the slowing economy, which will eat into government taxation revenues.


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