The people of Queensland have voted to retain public assets in public hands. What does this mean for the new government, and how can they demonstrate that they have fulfilled the people’s will? Sound financial management of our public sector would be expected by all Members of the Legislative Assembly.
In April 2013 the “Queensland Commission of Audit Complete Final Report” reported that assets are held by the General Government (departments) and the Government Owned Corporations. It noted that Queensland has a large stock of public assets. This stock must be maintained and managed, and this costs public money. What we don’t yet know is the condition of these public assets.
Time is ripe for a thorough analysis of the Balance Sheet of the State of Queensland, identifying:
i) which assets are included and which are not, and why;
ii) the condition of public assets;
iii) the services to which the assets are being applied; and
iv) the ongoing cost of those services, including the cost of maintaining all assets to the standard required.
Such an analysis starts with a balance sheet data for each year from the first Balance Sheet in 1998[1].
Each person has an interest in public assets. This interest includes our local government assets, our state government’s and the assets of the federal government. I did a rough estimate for the residents of Brisbane as at 30 June 2012 using 30 September 2012 population figures and arrived at the following:
| Jurisdiction | Assets | Liabilities | Net Worth | Population | Per Capita |
| Commonwealth | $390.6b | $646.8b | $-256.2b | 22,785,500 | $(11,243.99) |
| State of Queensland | $299.748b | $137.79b | $161.958b | 4,584,600 | $35,326.53 |
| City of Brisbane | $ 21.2b | $ 2.296b | $18.904b | 1,079,392 | $17,513.56 |
| TOTAL | $711.548b | $786.886 | $41,596.10 |
Figure 1: Balance Sheets of Public Sector as at 30 June 2012 (for residents of Brisbane City).
What has happened since then? And how has the State of Queensland’s Balance Sheet changed since it was first prepared in 1998? And is the balance sheet a reliable record of our stock of public sector assets and the liabilities accruing for their acquisition, management and maintenance and an indicator of the standard of services the assets support?
The Queensland Auditor-General, in his report on the results of his audit of the Queensland State Government financial statements 2013-14 considered “private sector funding arrangements into which the state has entered to pay for infrastructure that are not included in the balance sheet”.
This means that, were the above table for Brisbane residents updated for 2014 figures it would under-estimate the liabilities for net cash outflows by $12.88 billion. Accounting for public-private-partnerships is complex.
Services may rely on assets from three levels of Government. For example, the health of the Great Barrier Reef is affected by many governments as well as private sector entities.
Suffice to say, the incoming government will not know its full liabilities, nor its full stock of assets, from the current balance sheet. And it will not know how to manage the trend moving forward without good data since 1998.
The Government needs to improve the standard of the Balance Sheet to report on its management of public assets to the people of Queensland. This will be on-going and will extend beyond the term of this government.
Endnote:
[1] “Prior to 1997, governments in Australia prepared both budgets and financial reports on a cash basis and there was no composite record of assets held by government. As a result of public demand for increased transparency and accountability, governments in Australia agreed to report their annual financial results in accordance with the same GAAP standards as applied to the private sector, but with additional public sector specific standards to cater for those transactions unique to government.
…(Queensland) Departments prepared their first accrual financial statements in 1996-97 and the first whole of Government accrual financial statements were prepared in 1998-99.