Independent commission of audit

[ozbob]

Brisbanetimes --> Debt paid Labor's bills: audit

[ozbob]

Couriermail --> Newman Government to be urged to rein in budget with Queensland's debt headed for $100b in six years'

[#Metro]

I don't really understand what the purpose of the pie graph is. The funding from borrowings is IMPLIED that it is bad, but not actually STATED anywhere. It's CAPEX - what's wrong with funding CAPEX stuff from borrowings? If it were OPEX I would be more concerned.

[ozbob]

From the Brisbanetimes click here!

Sell more assets, Costello recommends

Sell more assets, Costello recommends
June 15, 2012 - 10:52AM

More of Queensland's assets will have to be sold off to rein in the state's finances a Commission of Audit headed up by former federal treasurer Peter Costello has recommended.

The report has also singled out the public service as a primary source of the state's financial woes.

Issued this morning, the Commission of Audit's Interim Report forecast a deficit of $6.634 billion for this year. The previous Labor government had forecast a deficit of $1.8 billion.

According to the commission, the State Government will have to find $3 billion of savings in the next three years.

Premier Campbell Newman ordered the Commission of Audit after winning the March election and appointed Mr Costello, Professor Sandra Harding and Dr Doug McTaggart to review the official books.

Using a different financial operating system to the previous government, the commission's expectation is debt will hit $100 billion by 2018-19 unless "immediate corrective action" is taken.

The report then goes in to say it cannot reach debt targets unless Queensland assets are sold off.

"This report outlines why this [reduction of debt by $25 to $30 billion by 2017-18] cannot be done through revenue and expenditure measures alone," the report said.

"It will require careful utilisation of the balance sheet and utilising the proceeds of asset sales to reduce debt."

Government-owned businesses mentioned in the report for possible sale in the future include Q-Fleet, Q-Build, Goprint, CITEC and Queensland Shared Services.

Further details on the proposed asset sales will be revealed in subsequent reports from the commission.

The report found the public service was a major factor in the budget blow-out.

It found over the 10 years from 2000-01 to 2010-11, employee expenses increased by 8.7 per cent with growth in employee numbers of about 3.5 per cent and wages growth of 5.2 per cent.

A 3 per cent cap on all public servant wages has been suggested in the report.

The interim report has also recommended tackling the debt in two stages.

The first stage is to stabilise the growth in debt and return the budget to surplus by 2014-15 - the same year the previous Labor government had forecast a return to surplus.

The second stage is to actively reduce the debt to restore Queensland's AAA rating. The report suggeted it was during this stage that some of Queensland's assets would have to be sold.

The Government has previously promised to only sell assets if it had a mandate from the people.

Read more: http://www.brisbanetimes.com.au/queensland/sell-more-assets-costello-recommends-20120615-20e3f.html

[HappyTrainGuy]

Just offload the QRN Shares

[ozbob]

From the Couriermail click here!

Audit of Queensland finances calls for higher taxes, overhaul of public sector and service delivery

Audit of Queensland finances calls for higher taxes, overhaul of public sector and service delivery

    by: Robyn Ironside, Koren Helbig, Paul Syvret
    From: The Courier-Mail
    June 15, 2012 10:52AM

AN EXAMINATION of the state's finances has recommended the Newman Government increase taxes, undertake massive reforms of the public sector and overhaul the way services are delivered.

The interim report of the Commission of Audit has also possible future asset sales after declaring "Queensland's financial position is unsustainable" due to a "lack of fiscal discipline".

Although the report savages the former Labor Government's financial management, it shows much of the expenditure of the last six years went to boosting frontline services in Health, Education and Child Safety.

However the increases in doctors, nurses and teachers were poorly managed according to the report, with the extra staff not being matched by increases in output particularly in Health.

Middle and upper management also expanded at a much faster rate than lower level roles and public sector wages growth outstripped that in the private sector by four per cent.

In order to address the burgeoning debt level and bring Queensland back to a strong financial position, the report recommends a "review of the range of services which should be provided by government" and "reprioritising and rationalizing core service delivery functions".

"The state is currently locked into a debilitating cycle of over-expenditure, ever-increasing levels of debt and crippling increases to debt servicing costs," says the report, by former federal treasurer Peter Costello, Professor Sandra Harding and Dr Doug McTaggart.

It makes a range of recommendations for action, which the Government will now consider and report back on by September.

A range tax increases have been recommended.

Residential and commercial property owners could pay a "temporary levy" of possibly $100 per property, raising an extra $200 million a year.

Land taxes could be overhauled to remove a $650,000 threshold, making the tax payable on every parcel of land owned.

An increase in the gambling tax has also been flagged as revenue collected is lower per capita in Queensland than in other states.

Raising the $208 per capital collection to the national average of $263 per capita would have raised an extra $250 million in 2010-11.

Mining royalties may also be increased to bring them into line with NSW, raising $100 million to $150 million per year.

The report has also outlined a lot of potentially unfounded commitments in relation to department such as Health, the impact of the carbon tax and the cost associated with the Commonwealth Games.

The carbon tax impact alone could be as much as $1.5 billion over the next four years.

[johnnigh]

I don't really understand what the purpose of the pie graph is. The funding from borrowings is IMPLIED that it is bad, but not actually STATED anywhere. It's CAPEX - what's wrong with funding CAPEX stuff from borrowings? If it were OPEX I would be more concerned.

We've all heard the term 'beat up' before. Mr Costello, who appended his signature after those who knew how to read balance sheets and income statements then manipulate them, had done the work, knew his job: to make black holes blacker and red ink redder.

Newman always knew he had to make room to break all his promises, this is only the start.

[ozbob]

... Residential and commercial property owners could pay a "temporary levy" of possibly $100 per property, raising an extra $200 million a year ..

I watched the presser, Mr Nicholls Treasurer said the above 'temporary levy' will not be done ...

No more  for George St ...

[colinw]

I get the feeling that we're being softened up for the budget.

Typical political ploy.  Tell everyone how tough everything is, and how harsh the budget will be, then when its not as bad as expected everyone breathes a sigh of relief and the Government doesn't get hammered as badly in the polls.

[ozbob]

From the Brisbanetimes click here!

Key facts in Commission of Audit report

Key facts in Commission of Audit report
June 15, 2012 - 11:27AM

Recommendations

    Asset sales.
    The government retain its three per cent cap on annual growth in employee expenses, beyond the 2015/16 cap.
    Apply land tax to all parcels of land, with a general exemption for the principal place of residence.
    A temporary deficit reduction levy applied to all rateable properties. Those with multiple properties would pay the levy multiple times.
    Increase mining royalties, in line with levels in New South Wales.

Fast Figures

    Gross debt expected to be as expected $64 billion in 2011/2012, reaching $100 billion by 2018/19 unless urgent action is taken to pay it down.
    Interest on the debt will be $115 million a week, or $685,000 per hour.
    Interest is the fastest growing government expense in Queensland, over health, education and public transport.
    Gross debt has increased more than tenfold in five years.
    Expenses grew at an average annual rate of 10.5 per cent between 2006 /07 and 2010/11, while revenue grew 6.9 per cent.
    Between 2000/01, employee expenses increased by an average of 8.7 per cent per year and full-time public service numbers have increased by 40 per cent since June 2000.
    The commission recommends the government aim for a $3 billion improvement to the bottom line over three years to 2014/15.
    The budget deficit using a fiscal balance is $6.634 in 2011/2012 and is projected to be $9.504 billion in 2012/13.
    Without corrective action, the fiscal deficit in 2015/16 would be $19.7 billion.

AAP

Read more: http://www.brisbanetimes.com.au/queensland/key-facts-in-commission-of-audit-report-20120615-20e64.html

[Fares_Fair]

ouch! 

[ozbob]

Treasurer and Minister for Trade
The Honourable Tim Nicholls
15/06/2012

Strong medicine needed for Queensland's fiscal repair

THE shocking extent of Labor's economic mismanagement has finally been revealed with today's release of the Independent Commission of Audit's Interim Report, Queensland Treasurer Tim Nicholls said.

The sobering Report details the previous Labor Government's "lack of fiscal discipline" and predicts state debt will hit $100 billion by 2018-19 unless urgent action is taken to pay down debt.

"That's an interest bill of $115 million a week or $685,000 per hour that all Queenslanders will have to pay," Mr Nicholls said.

"Interest is now the fastest growing government expense in Queensland - not health, not education, not public transport - and it's all due to Labor's appalling reckless financial mismanagement.

"This Report exposes Labor's deceptive and systematic practice of using highly optimistic budget assumptions that have masked the real magnitude of debt and deficit levels.

"Labor's irresponsible and misleading economic policies are ent irely responsible for the state moving from a position of considerable financial strength to a position of weakness in the last six years."

Mr Nicholls said the former Government had chosen to ignore the harsh economic realities to satisfy its own misguided political purposes.

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

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

Mr Nicholls said the Report outlined the need for major 'fiscal repair' to end the debilitating cycle of over-expenditure and crippling increases in debt and debt-servicing costs.

"In 2011-12, 96 per cent of the Government's capital spending programme was sourced from debt.

"The former Labor Government essentially borrowed money to pay the bills.

"This report makes for very sobering reading but the Newman Government is committed to fixin g the mess Labor left behind.

"The Commission has recommended some very strong medicine which we all must take to get Queensland's finances back in the black.

"The Newman Government was elected with a mandate for returning this state's finances to a sustainable level and we will do just that."

Mr Nicholls said the Newman Government would consider adopting all but one of the recommendations in the lead up to the September Budget.

He said the government had already categorically ruled out introducing the $100 'State Deficit Levy' on rateable households, a tax previously introduced by the Kennett Government in Victoria.

Mr Nicholls thanked the three Commissioners, Hon Peter Costello AC, Professor Sandra Harding and Dr Doug McTaggart and the Commission's staff for their professionalism and hard work in preparing the Interim Report.

The Commission will deliver its Final Report in February next year, which will chart a path for fisca l repair.

ENDS 15 June, 2012

[ozbob]

Brisbanetimes http://www.brisbanetimes.com.au/

Queensland in 'critical condition': Costello

Former federal treasurer Peter Costello paints a bleak picture of Queensland's finances, saying it needs "a major debt reduction" including "utilising the proceeds of assets". (01:31)

[#Metro]

Just offload the QRN Shares

Re-organise the BT bus network to cut out all the air parcel services, turn services like 172, 306 and 322 into feeder services terminating at interchanges.

[ozbob]

Brisbanetimes --> Public servants' nervous wait

Not good ...

[HappyTrainGuy]

Don't get me started on cutting/modifying BT routes TT. Us both would be here all month haha. GCL, 308, 326, 327, 328/329, 330, 335, 338, 340, 341, 357, 359.

[somebody]

210k FTE public servants
1683k total employed people.

Hmm. At least 1 in 8 is a permanent public servant.

[ozbob]

--> http://www.commissionofaudit.qld.gov.au/reports/interim-report.php

Queensland Commission of Audit
Interim Report June 2012

[mufreight]

Just offload the QRN Shares

And lose forever the dividends paid by the most profitable freight operator in Australia.  More short term gain that crerates more long term pain, not the most sensible move in terms of ecenomics.

[Fares_Fair]

Queensland Government currently holds 34% stake in QR national

[somebody]

Just offload the QRN Shares

And lose forever the dividends paid by the most profitable freight operator in Australia.  More short term gain that crerates more long term pain, not the most sensible move in terms of ecenomics.

I would be very surprised if these dividends exceed the interest bill on the money which would be released.

[SurfRail]

Just offload the QRN Shares

And lose forever the dividends paid by the most profitable freight operator in Australia.  More short term gain that crerates more long term pain, not the most sensible move in terms of ecenomics.

But they are more profitable now, largely because they have been able to shed the cost of employing people who were only working there because it was in public hands and not because they were needed. 

That means they can increase intensity of service, employ more people in productive jobs and be a source of more taxation than before.  Even private dividends are still taxable income.

[Jonno]

Cut freeway, tunnel and motorway my spending.  Save billions and stop making out transport problems worse!!!

[ozbob]

From the Brisbanetimes click here!

Costello's audit 'politically tainted'

Costello's audit 'politically tainted'
Kym Agius
June 15, 2012 - 3:43PM

Former federal treasurer Peter Costello's interim audit of Queensland's finances is "tainted politically", the state opposition says.

The report handed down today shows debt will grow to $100 billion by 2018/19 - but shadow treasurer Curtis Pitt says this assumes Queensland will experience a repeat of the floods, cyclones and Global Financial Crisis.

"This is based on an absolute worst-case scenario," he told reporters in Brisbane.

"This (report) has been tainted politically by Peter Costello's involvement."

Mr Pitt says it's now clear the government will cut public service jobs and sell off assets to pay down debt.

"It would be a very brave government to contemplate that," Mr Pitt said, considering the backlash felt by Labor after it sprung $15 billion worth of asset sales on voters after the 2009 election.

Mr Pitt says Mr Costello's report shows the economy is tracking exactly how Labor said it would in its mid-year financial review in January.

Debt would still come in at $65 billion this financial year and the state would return to surplus in 2014/15.

"They've tried very, very hard to find a massive black hole that doesn't exist," he said.

He didn't apologise for the debt on the books, arguing Labor did its best to endure the double whammy of the GFC and natural disasters.

AAP

Read more: http://www.brisbanetimes.com.au/queensland/costellos-audit-politically-tainted-20120615-20ewr.html

[Fares_Fair]

Is this true, repeating the floods and GFC to arrive at the stated figures, or is it just grandstanding?

[SurfRail]

They both are.

Everybody knows:

- The ALP got the state into debt.
- The LNP want to bury the hatchet into them for it.

Those are the 2 pertinent facts - the justification and moralising over whether either is justified (and to what extent) is another matter. 

[Otto]

Full Interim report

http://www.commissionofaudit.qld.gov.au/reports/interim-report.php

[ozbob]

Brisbanetimes --> State's AAA rating five years away: report

[ozbob]

http://www.commissionofaudit.qld.gov.au/reports/interim-report-risks-government-commercial-businesses.pdf

Pages 165 - 171   Queensland, TransLink ...

The cost analysis based on trips alone is misleading.  Need to look at the passenger kilometres to better understand the situation.  It also appears that Travel Train has been included.  Very superficial.

Makes me wonder about the real rigour of the interim report.  Appears to be designed to support a political agenda, tainted by politics and lacks real objectivity.

Fail ....

Passenger kilometre average trip for rail is >> bus, once that is analysed rail is actually more cost competitive and with high frequency/loading is actually cheaper.

There are certainly efficiencies to be made.  The DDA liability (2 $ Billion ) is something we have been attempting to get sorted as upgrades/construction has proceeded.  For example ensuring the rebuilt Darra station as full height platforms was a bit of a 'no-brainer'  but they failed.  This means much more costs in the longer term.  Indooroopilly, another DDA money trap, opportunity missed. And so on ...

What about new rolling stock?  ATP? 1.6$ Billion.  The long term neglect by successive governments is coming home to roost ...

DOO looks easy but won't happen without very significant costs.  But it could be argued that those costs will still be similar with two person trains anyway.

One thing is clear.  The entire public transport network must be recast to support core frequent network. Use the rail network properly.

15 minute frequency is going to be very difficult to achieve on most lines unless there is further significant infrastructure investment.  It might be best to go to 20 minute as a first step.  This would be achievable on most lines, certainly Ipswich <-> Caboolture.   They also need to start to perhaps think differently.  Eg.  A shuttle layer Rosewood - Darra, connecting into high frequency out of Springfield as well as Ips CBD express patterns around the clock.

[#Metro]

This (interim) report contains a lot of 'short stoppers', emotive language, short on explanation about WHY something is bad (lot of implications in it, rather than explicit statements) and hand-waving.

As with Ergon, this CSO represents a significant funding risk to the State. In the absence of competitive market pressures, it is important to ensure that there are appropriate incentives for QR to contain costs and manage its business appropriately in order to limit the State's financial commitment.

Risk! Danger Danger! All businesses experience a level of risk.

'Absence of competitive market pressures' - maybe we will see QR go down the path of the Melbourne model and see it privatised. But what would the purpose of that be? The capital cost of borrowing from commercial sources is much higher - unless they would allow contractors to borrow from the QTC... but that's riskier - commercial companies don't have a tax base.

There is a complex set of cash flows which support the capital structure and operations of QR, as illustrated in Chart 10.5 below. In particular, there is a circularity of cash flow, with dividend and tax equivalent payments by QR back to the General Government sector being made possible largely by the General Government sector subsidising its operations through debt, equity injections and grants through the TSC. In this process, there is a leakage of funds due to the costs of administering this structure.

Here they criticise the 'circularity of cash flows'. Er, got a better model? And TransLink's costs are just 6%, and for that patronage has exploded since 2004 and - off the balance sheet - the benefits to the state - public welfare / benefits to society - from an integrated, well run PT system, is something not accounted for in this purely COST-ONLY ANALYSIS report.

The conclusion of this review was that, based on the costs to implement such a system, European Train Control System Level 2 was the preferred rail safety system for the south east Queensland rail network. An amount of $25 million has been allocated for QR to undertake a detailed study of feasibility, planning and implementation issues. Current estimates from QR indicate that the cost of such a system is expected to exceed $1.6 billion.

It can be staged over time to spread the cost. Some parts of the network will be more costly than others, and some lines more worthwhile that others (ATP probably not required for Doomben line, for instance).

The Translink grants in 2010-11 were used to fund:
QR Citytrain TSC (54%)
the SEQ bus and ferry services subsidy (36%)
other networks (4%)
Translink's operating costs (6%), including the administration of the GoCard
ticketing system.

I've always thought that TransLink has been doing a good job - despite what many on this forum may think - their operating costs are just 6%. So even if TransLink was TOTALLY abolished and PT magically organised and ran itself, the most you could save is 6%. Hardly worth it! No the big mess is in QueenslandRail - just look at it! TERRIBLE!
And why is that? Frequency is rubbish, network structure competes with buses, etc - that's why.

Chart 10.8 shows the cost per trip for rail and bus/ferry, paid to the providers (primarily QR and Brisbane Transport). Rail transport costs significantly more than bus transport per average trip, highlighting the need to consider enhanced mode contestability. The payments contracted by Translink with the operators are to provide the service, but do not appear to have the appropriate incentives to increase patronage and thereby reduce the overall cost per trip.

The graph is right, but the interpretation and recommendations that flow from it are WRONG. This is an effective call for self-cannibalisation. The exact opposite is required due to SPATIAL nature of transit - recasting around the CFN. How many times do we have to bang on about this. Perhaps they should all fly to Toronto to see how it works!

And once again, the onus is placed on operators to increase patronage - WRONG WRONG WRONG! Transport is spatial and temporal - it is not like selling bread on a shelf - you need CONNECTIONS AND NETWORKS. The onus needs to be on TRANSLINK to grow patronage, NOT operators.

As highlighted earlier in this Section, the Commission considers there is a need to review the roles of both Translink and QR in determining an appropriate structure and funding arrangements for the efficient delivery of public transport services by the State.

What the hell does that mean? And all the while, that big phantom, Brisbane Transport, which carries HALF THE PAX and also soaks up huge funds from BCC and Queensland Treasury/Investment corporation with its lease-back arrangements escape scrutiny and is effectively invisible to review! Did they look at the huge amounts of waste in the bus network? No, of course they didn't. They want Maroon CityGlider...

[#Metro]

Oh, and the biggest BOMBSHELL in this report - the independent commission isn't independent.

Ask yourself this question - INDEPENDANT OF WHAT?

Please explain how having your state finances reviewed by someone from your own political party is 'independent'. Oh that's right - it isn't.

Not to detract in any way from the arguments or conclusions drawn, but to call it 'independant' is Ridiculous.

[Mr X]

I never expected anything less than "doom and gloom" from this report. It means they can then blame Labor whenever the LNP want to back out of committing to something.

I read somewhere that as a proportion to revenue, QLD's debt is actually smaller than BCC's but I haven't seen proof of that claim yet.

[mufreight]

Just offload the QRN Shares

And lose forever the dividends paid by the most profitable freight operator in Australia.  More short term gain that crerates more long term pain, not the most sensible move in terms of ecenomics.

But they are more profitable now, largely because they have been able to shed the cost of employing people who were only working there because it was in public hands and not because they were needed. 

That means they can increase intensity of service, employ more people in productive jobs and be a source of more taxation than before.  Even private dividends are still taxable income.

QRN was operating well in the black long before the split from Queensland Rail, the profitability of QRN as a private entity has shown its biggest increase because of its sheding of what were previously rail services for general freight and the staff required to operate them.
While the level of gross turnover will increase over time from the increases in mineral traffic the overall operating profit figures will decline when there are no more assets left to sell off and what were community obligation services are discontinued.
The figures that the Audit has presented have quite obviously been politicaly massaged and sanatised to present a desired outcome and justify the Newman Government not providing services and infrastructure that was promised pre election.

[ozbob]

Media release 16 June 2012

Queensland: 'Independent' Commission of Audit - some comments on Public Transport

RAIL Back On Track (http://backontrack.org) a web based community support group for rail and public transport and an advocate for public transport passengers notes the 'Independent' Commission of Audit's recent interim report (1).

Robert Dow, Spokesman for RAIL Back On Track said:

"Pages 161 - 171 of the report deal with transport - in particular, Queensland Rail and TransLink. Noticeably, Brisbane Transport - which has leaseback agreements with the state and carries roughly half the passengers in SEQ - has escaped review. Why? While in certain cases the bus network complements the rail system, but because the basic Brisbane bus network pre-dates TransLink it is not as efficient and effective as it could otherwise be. Refusal to install T2 lanes and other bus priority measures on major arterial and sub-arterial roads such as Coronation Drive, Wynnum Road, and Sir Fred Schonell Drive mean that extra government funds are being wasted on paying for more drivers and buses to sit in traffic so that single occupant vehicles can have their second lane, while revenue from potential extra passengers are being lost due to the degradation of service quality. The failure to separate Brisbane Transport from Brisbane City Council has also led to money-wasting inefficient proposals such as Maroon CityGliders, to the detriment of the wider network."

"Many aspects of the report perform 'cost-only analysis' (rather than cost-benefit analysis) and appear to neglect quantifying and comparing the outcomes and outputs that flow from the purpose of government - providing services in to increase the benefits to the public. For example, chart 10.6 on page 169 shows an increase in TransLink's grant revenue, but the graph is meaningless without a comparison to the purpose and outcomes of funding TransLink - increasing public transport patronage and providing coverage services. What could possibly be the purpose of a so called 'analysis' if it only analyses inputs but neglects to compare them back to outcomes and outputs?"

"Pages 169 & 170 also bemoans the fact that bus patronage is increasing but train patronage is not despite increased funding for Queensland Rail, and then wrongly recommends 'enhanced mode contestability'. It appears that the commission does not understand that, in a network, you don't want the left hand to be competing with the right hand, especially when they are both government funded. Essentially, the report implies that because the right hand (buses, ferries) is doing better than the left hand (trains), that the left hand should be cut off. For obvious reasons, we disagree. The reason for the discrepancy is very simple - buses have had a number of no-nonsense high frequency, all-day services added over the last decade (109, 66, and BUZ services 100, 120, 130, 140, 180, 196, 200, 222, 330, 333, 340, 345, 385, 412, 444, CityGlider). And what has the rail network got in that time? High frequency on the Ipswich line was extended by just two stations - from Corinda to Darra with the opening of the Richlands line. The rest of the money was poured into concrete to the neglect of services. Recast the bus network to feed trains, put on high-frequency Train Upgrade Zones (TUZ, 2) and you will solve this problem."

"The simplistic cost analysis chart 10.8 page 170 based on trips only is misleading.  Additional metrics such as passenger kilometres and trip length itself need to be properly considered.  Passenger kilometre average trip length for rail is much greater than bus, once that is properly analysed rail is actually more cost competitive and with high frequency/loading is actually cheaper. Which is why rail was chosen for the Moreton Bay Rail Link over bus. There are certainly efficiencies that can be made however with all modes."

"RAIL Back On Track looks forward to the commission's final report, and in particular, an analysis of Brisbane Transport, Maroon CityGlider, the removal of duplicative paper ticketing, and how efficiencies may be gained by recasting services around a Core Frequent Network by reducing bus-train competition and unnecessary direct services (3).

References:

1. http://www.commissionofaudit.qld.gov.au/reports/interim-report.php

2. http://railbotforum.org/mbs/index.php?topic=8127.0

3. http://railbotforum.org/mbs/index.php?topic=5173.0

Contact:

Robert Dow
Administration
admin@backontrack.org
RAIL Back On Track http://backontrack.org

[SurfRail]

QRN was operating well in the black long before the split from Queensland Rail, the profitability of QRN as a private entity has shown its biggest increase because of its sheding of what were previously rail services for general freight and the staff required to operate them.
While the level of gross turnover will increase over time from the increases in mineral traffic the overall operating profit figures will decline when there are no more assets left to sell off and what were community obligation services are discontinued.
The figures that the Audit has presented have quite obviously been politicaly massaged and sanatised to present a desired outcome and justify the Newman Government not providing services and infrastructure that was promised pre election.

I'm happy to accept that they shouldn't have been given general freight - that I agree is just asking for it to be axed.

Also agree on the report.  It is a bunch of bollocks and wouldn't pass muster against any reasonable accounting standard.

[Fares_Fair]

QR National notes from Qld Audit.

10.8. QUEENSLAND TREASURY HOLDINGS PTY LTD

Queensland Treasury Holdings (QTH) is a special purpose holding company
established to hold residual assets remaining as a result of previous asset sale
processes. It currently holds assets in the form of residual State interests in:
 QR National Limited (approximately 34% of the shares)
 Dalrymple Bay Perpetual Lease and port land lease
0
0.5
1
1.5
2
2.5
3
3.5
$ per $100 wages
2011-12
2010-11
2009-10

Risks of Government Commercial Businesses 10.
Queensland Commission of Audit Interim Report June 2012 Page 177

Page 23
 Port of Brisbane land
 Cairns and Mackay airports land
 Queensland Lottery Licence and Golden Casket brands and trademarks
 Central Queensland Coal Network.

Continued ownership of these assets by QTH exposes the State to uncertain
financial risks, depending on decisions taken as to the management of these assets.
This includes QTH's ownership of QR National shares on behalf of the State.
As part of the QR National IPO, the State remained as a cornerstone investor,
currently holding approximately 34% of the shares. Under an escrow agreement, the
State has undertaken not to sell any shares except in circumstances noted in the
prospectus until the publication of the 2012 QR National results. These results are
expected in August 2012.

The General Government sector took full account of the sale of the QR National
shares at the date of sale to QTH. The debt raised by QTH to pay for the shares
has a current value of approximately $2.2 billion and will be repaid on sale of the
shares. The State has guaranteed the QTH debt. Should the value of the shares fall
below the value of the debt, the State will be liable to meet the shortfall.
The nature and timing of any disposal of these assets will affect the value to be
realised by the State, and hence the impact on the State's balance sheet.

[ozbob]

I have noted a growing scepticism with this so called ' Independent' commission of audit.

Interesting interview on Mornings 612 ABC Brisbane with Alex Scott the General Secretary of the Queensland Public Sector Union (QPSU).

He outlined concerns.  The public transport analysis is absurd, suggests that the rest of it needs to be taken with a grain of salt IMHO.

Definitely more political than meaningful.  The Brisbane media has largely swallowed it hook, line and sinker, they are not doing their job of balance properly in many cases.

[colinw]

Given Costello's record, basically nil Federal support for public transport projects during his tenure as Treasurer, it is entirely unsurprising to see the PT system singled out for negative comment.

[somebody]

The cost analysis based on trips alone is misleading.  Need to look at the passenger kilometres to better understand the situation.  It also appears that Travel Train has been included.  Very superficial.

I and Jarrett Walker have a strong bias towards passenger trips over passenger-km.  Longer journeys should (ideally) be made in larger capacity vehicles which should lower their cost per km.  This is where metrics like boardings per service-km make a fair bit of sense.  I'd prefer that length of trip be more of a footnote - otherwise you are biasing towards people living more unsustainable lifestyles of those living more sustainably.

Actually, I think that the main metric should be boardings per total-km.  Why should dead running be ignored???

Doesn't mean that you should completely ignore trip length though.

You're probably going to say "get a grip" !

[ozbob]

Proper analysis looks at the lot.

Look at it like this.  If the average bus trip is 1 km and costs $3, and the average rail trip is 15 km and costs $10.  Which is the cheapest?

This simple example is why you need to consider the lot.