THIS WEEK has seen one framework of political rhetoric usurped
by another in Queensland. The conservative
refrain of “no spending, no debt” has been swamped by the Labor language of “jobs
jobs and jobs”.
Can the shock-horror rhetoric about debt last much longer? The reality is that heavy debt has always
been a feature of the Queensland government, and always will be.
Developing the State through Debt
Developing the State through Debt
Ever since Queensland became Queensland in 1859, politicians
of all ideological hues have borrowed heavily.
We’ve had no choice: it is the only way to fund infrastructure
development in this decentralised state.
The biggest transport infrastructure project Queensland had
for about a hundred years was the colonial railways.
I wrote previously that from 1887 to 1883, the Queensland government
splurged on rail, borrowing £7 million to construct 3,000 kilometres of it.
We had the highest per capita debt in the British Empire. And it wasn’t just railways that made us
scrape out the public purse down to its silk lining.
For over a hundred years, Queensland politicians spent up
big on ports and maritime infrastructure.
Colonial governments established ports at Gladstone, Bowen, Rockhampton
and Mackay. They set up harbour boards
and directed public funds to clear rivers, and to dredge sandbars and mudflats.
The spending of public money to gouge out shipping channels, raise wharves and build ports was a passion for our early politicians. After all, most were pastoralists, and their private fortune depended on this public expenditure.
Freudian Analysis Needed For Tunnel Fascination.
The creation of transport infrastructure through public
debt was not just a colonial fixation. In
the 21st century, the railway mania has been replaced by a tunnel obsession.
At Brisbane City Council under Campbell Newman, debt has
reached $2.1 billion whilst revenue sits at $2 billion.
Professor John Quiggins points out that is a debt / revenue ratio of
over 100%, a rate that Peter Costello said is unacceptable for a state government.
Until recently, few have raised a squeak about the debt
burden taken on to build transport infrastructure. The whole wealth of Queensland is literally
dependent on it. At one stage in the 19th
century, the pastoral industry accounted for 95% of our economy. Queensland wealth and society hinged on transporting beef and wool
out of the state.
Our economy didn’t ride on the sheep’s back – it rode out in the
cattle trucks and into the holds of steam ships. Today it rides down a conveyer belt and into
a steel hull.
Paying Off Debt: How We've Always Done It.
Now, that’s a romantic image that works well to explain
state debt and our economic history. But
it doesn’t stick in the public psyche like the image of a maxed-out credit
card, a much easier grasped picture.
And the question evoked by that image and mental
frame is this: how we are going to pay off our loans, Pa?
The answer in real-life economic terms is this: the same way we
always have, son. We exploit our resources
and land. Whenever
Queensland has needed more revenue, we have squeezed it out of industry based on
our natural resources, and opened up a seemingly endless supply of land for housing
and industry.
The mental frame and popular rhetoric of debt as a household
problem won’t disappear. It works too
effectively, and conservative politicians know it resonates deeply.
But it may be tempered by a competing narrative of “jobs
first”, and maybe even a bit of historic economic reality.
References:
Raymond Evans, "A History of Queensland", Cambridge Press.
J Laverty, "The Queensland Economy 1860-1915" in Murphy, Joyce and Hughes, "Prelude to Power", Jacaranda Press.
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