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Public sector job and spending cuts the LNP’s only option to balance budget in four years, report finds

An economic a##lysis commissioned by a Queensland union has found the LNP would have to slash thousands of public sector jobs to honour its promise to slash Queensland’s $8.1 billion spending deficit within four years.

The report by progressive research group Per Capita, commissioned by the Together union, suggested the only way for the LNP to achieve a budget surplus in that timeframe would be to impose what they called “austerity measures”.

Per Capita economists Matthew Lloyd-Cape and Shirley Jackson a##lysed the LNP’s modelling and found pursuing a surplus through austerity could be damaging to livelihoods, health, and equality.

LNP leader Deb Frecklington has ruled out new taxes and public sector redundancies during the election campaign.

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But the LNP has not explained how it would balance the budget in a recession brought about by the COVID-19 pandemic, which had prompted governments to go further into debt to prop up the economy.

The Per Capita report argued that during a recession a private sector recovery “envisioned by austeritarians is simply impossible”.

The report found that to reach a surplus in four years, 29,000 jobs would have to be cut from the public sector in the next financial year, which would then have a flow-on effect to the loss of 23,000 jobs in the private sector.

The economists predicted the job losses would increase unemployment by 2.45 percentage points to about 10 per cent, as well as reducing growth in the Queensland economy by about 1.7 percentage points.

Together union secretary Alex Scott said the LNP’s budget balancing promise was “cheap populism”.

“We think they believe it will be popular, votes-wise, to prioritise debt and deficit and not do the right thing in terms of the economy,” Mr Scott said.

A man with grey hair at a desk.
Alex Scott says the balanced budget promise is “cheap populism”.(ABC News: Curtis Rodda)

“It is a recipe for economic disaster and social disaster, we want them to abandon this policy.”

Mr Scott said any attempts to balance the budget would “deepen the recession, forcing tens of thousands of workers onto the dole queue”.

“The LNP proposals are out of step with everybody else in the world economy, but also this report clearly shows the human cost and the economic costs of measures that prioritise debt and deficit over jobs and services.”

‘Not just blokes in high-vis’

The report was critical of both major parties for their focus on construction and infrastructure jobs, a field dominated by men.

“The government stimulus package — whether it be from the LNP or the ALP — needs to focus on more than just blokes in high-vis suits,” Mr Scott said.

He said the major parties should be seeking to create more jobs in areas such as health, aged care and hospitality.

The Per Capita report noted that construction work, while often well paid, often involved long hours and shift work, which excluded women with child-care responsibilities.

Proposed solutions included introducing a female representation quota for construction companies and requiring companies competing for government jobs to demonstrate gender equality.

“Both political parties are just as bad in relation to the pink-collar recession.”

LNP rules out forced redundancies

The LNP branded the Per Capita report’s conclusions “garbage”.

A party spokesperson said “unions should be protesting about Queensland having the highest unemployment rate in the nation instead of churning out garbage like this”.

LNP Qld Opposition leader Deb Frecklington at a press conference
Deb Frecklington has already promised to spend billions on a “big, bold, visionary plan”.(ABC News: Tim Swanston)

The spokesperson said the LNP had a plan to create 150,000 jobs to lead Queensland out of the recession.

“The LNP has ruled out forced redundancies and will create thousands of new key frontline service jobs,” the spokesperson said.

“Labor has no budget and no plan to create jobs.”

The Labor party has been contacted for a response.

UQ academic backs findings

But University of Queensland economist John Quiggin said he agreed with the report’s findings.

He said the Per Capita report “correctly criticises both the Labor Government and the LNP for their focus on high-cost infrastructure projects at the expense of the predominantly young and female service workers most directly harmed by the pandemic crisis”.

Professor Quiggin said it was not clear how the LNP would balance the budget and commit to major projects such as duplication of the Bruce Highway and planning for a new Bradfield scheme that would cost billions of dollars over the next decade.

“Implementing these promises would require severe cuts elsewhere,” he said.

“The claim that this could be achieved without forced redundancies and with the creation of thousands of new frontline jobs lacks credibility.”

“Given the likely continuation of depressed conditions for some years to come, the outcomes would probably be worse than those under similar policies adopted by the Newman government.”


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