Queensland’s future is certainly looking brighter now ut the LNP government has its work cut out, warns economics consultant Andrew Russell.
After a savagely fought campaign and a tense polling day, Queensland elected an LNP government and ended a near-decade of Labor Party rule on 26 October 2024. The LNP managed to win 52 seats and will thus govern with an outright (if slim) majority. Labor won 36 seats, and the Greens have been reduced to a single seat. The margin of victory was smaller than was predicted in the early stages of the campaign. Queensland’s new Premier, David Crisafulli, will serve a four-year term and hopefully be able to deliver genuine progress, or at least prevent any further regression in the State’s prospects and Queenslanders’ quality of life. What are Queensland’s prospects in the aftermath of the 2024 State election? And what challenges face the incoming government? Before addressing these questions, it is worth considering the context in which the election occurred and the issues which drove it.
POLITICAL CONTEXT
Queensland is Australia’s second largest State by area and third most populous. By global standards, it is highly urbanised—the vast majority of the State’s population live in its south-east corner—but is nevertheless Australia’s least urbanised State. While Queensland is perhaps best known for tourism, the State’s economy is highly reliant upon primary industries (a term derived from the work of economist Colin Clark, who spent much of his career at the University of Queensland), which are geographically dispersed and often very distant from the capital. Since the foundation of the economy is quite far from the vast majority of the voters, there is an unavoidable risk of these voters taking this foundation for granted or being susceptible to misinformation about it; so it comes as little surprise that regional Queensland vigorously advocates for itself.
Queensland’s preceding nine years of Labor government can be fairly characterised as serious mismanagement. Queensland’s government debt is approaching $170 billion, government debt per capita has nearly quintupled, and the bureaucracy’s wages bill has increased by more than 75 per cent. In ‘IPA Research Note: Queensland By The Numbers’ (November 2024), IPA Research Fellow Saxon Davidson shows:
- Queensland has had the lowest annual economic growth rate of any Australian State (0.67 per cent) in the last decade;
- Private investment as a percentage of Gross State Product has declined by almost half;
- Employment growth in the public sector has been twice that of the private sector; and
- The State is set to become even further indebted over time.
This dire state of affairs becomes even more concerning as Brisbane is set to host the 2032 Olympic Games. The Games infrastructure investment is widely expected to balloon, not least due to Labor’s Best Practice Industry Conditions policy—colloquially referred to as the ‘CFMEU tax’. Tulipwood Economics’ Joe Branigan estimated this policy already costs taxpayers at least $1 billion per year.
Labor’s managerial incompetence extended beyond purely fiscal issues. Law and order greatly deteriorated under Labor. The statistics Davidson cites show that from the years 2014 (the last full year of the Newman administration, which ended mid-February 2015) to 2023 (the last year in which Labor Premier Annastacia Palaszczuk held office before being replaced by her ALP colleague Steven Miles), violent crime increased by 45 per cent, the incarceration rate increased by 29 per cent, and the number of frontline police officers per 100,000 Queenslanders dropped from 234 to 218. A lot of the increase in violent crime is attributable to young offenders. IPA Research Analyst Mia Schlicht cites ABS data showing the number of young offenders who committed violent crime has increased by 45 per cent. Labor attempted to address this youth crime epidemic by repealing a clause in Queensland sentencing guidelines that said incarceration of minors should be a last resort, but Schlicht’s research would suggest this is both extremely expensive (with minor detention costing five times more than adult detention) and relatively ineffective (with a 70 per cent recidivism rate). Nonetheless, it was certainly ‘too little, too late’ for the Queensland public, as they strongly supported the LNP’s ‘Adult Crime, Adult Time’ policy at the ballot box.
The LNP aims to address the youth crime crisis early on.
In hindsight, it is quite appropriate that the Queensland election happened so close to Halloween, because (since they lacked a positive record to run on) Labor ran a horror-movie-grade scare campaign. When Queensland voters weren’t being frightened by phantasms of dystopias straight out of The Handmaid’s Tale (despite the LNP running on a promise of not changing abortion laws), they were being terrified by images of former LNP premier Campbell Newman, who was depicted as a chainsaw-wielding madman that gutted the bureaucracy and subjected critical public services to a death-by-a-thousand-cuts. When they weren’t accusing the LNP of having secret plans to outlaw abortion or privatise State-owned hospitals, they engaged in extreme acts of pork barrelling, the most extreme of which was free school lunches for Queensland children. Interestingly, this is a policy that Labor rejected three years ago when the Greens had it as part of their platform. Economic reality, however, did not change in the intervening three years; Gene Tunny of Adept Economics said that this particular promise from Miles was “not sensible policy” (after all, there is indeed no such thing as a free lunch!). Labor’s campaign ultimately failed; however, it almost certainly was successful in winnowing away the LNP’s eventual majority. Polls early in the campaign predicted a much larger margin of victory than the LNP finally received.
IMMEDIATE PLANS
As one of his first acts, Premier Crisafulli shut down Queensland’s ‘Truth-telling and Healing Inquiry’. This inquiry was launched in early 2024, despite Queensland being the strongest No-voting State in the Indigenous Voice referendum of late 2023 (68.21 per cent of Queensland voters said NO). Despite the undeniable signal that most Queenslanders were frankly sick and tired of the professional activists’ Grievance-Industrial-Complex, and the fact that many in regional Queensland were worried that further pandering to said Complex would risk the violation of their property rights in forms ranging from more bureaucratic impositions to outright expropriations (akin to what happened under Western Australia’s Indigenous Heritage laws), Queensland Labor proceeded to set up this inquiry anyway. Crisafulli’s shutting down of the inquiry therefore represents a positive step for property rights, against rent-seeking activists, and for respecting the democratic choices of Queenslanders.
The LNP also aims to address the youth crime crisis early on in its term by establishing a ‘regional reset’ program of early intervention for youth at risk of becoming habitual criminals. Given the high cost and high recidivism rate of Queensland’s youth detention system, these early-intervention programs may be startlingly more cost effective. Schlicht’s research for the IPA shows a similar program in California costs taxpayers a quarter of the cost of a prison, and over 20 years reduced recidivism rates from 40 to 15 per cent. In addition, the new LNP government has been quick to address the issue of infrastructure expenditure—on 14 November they suspended the Best Practice Industry Conditions policy. This is a severe blow to the already scandal-plagued CFMEU, which has since August been under the control of an independent administrator due to serious allegations of violence, corruption, and links to outlaw motorcycle organisations.
The big challenge is cutting $7 billion from spending.
While the suspension of the ‘CFMEU tax’ has certainly provided some relief for those hoping Brisbane avoids the fate of Montréal (which infamously took 30 years to pay off its debt just for the main stadium built for the Olympic Games in 1976), Queensland’s new Minister for Sport and Racing and Minister for the Olympic and Paralympic Games Tim Mander will be holding a further review into what infrastructure is actually necessary for the event. How much said review will be able to cut remains to be seen, especially in light of the reality that budget blowouts from hosting the Olympics are the historic norm rather than the exception. For example, research from Oxford University’s Saïd Business School shows the Sydney 2000 games suffered a 96 per cent cost overrun and, as bad as that sounds, is noticeably less than the average cost overrun of 172 per cent (measured from Rome 1960 to Rio 2016). Needless to say, Mander faces a challenge.
That is only part of the fiscal challenge the new government faces. The new Treasurer David Janetzki (who is also Minister for Energy and Minister for Home Ownership) aims to reduce government spending on external consultants by bringing such consultancy in-house. From an Institutional Economics perspective, this is a somewhat puzzling decision, as producing advice or consultancy in-house is typically the last resort and only done when highly specialised expertise is required on a very frequent basis. However, the biggest challenge he faces is meeting his aim of cutting $7 billion from projected spending. This is clearly a necessary measure since (as Saxon Davidson’s research demonstrates) Queensland is rapidly approaching the edge of the proverbial fiscal cliff. It must be asked, how is the LNP going to do this without any reduction in the number of (or aggregate wages of) government employees?
The fiscal situation in Queensland is dire, and yet Queensland’s political culture has a crippling case of what economist Bryan Caplan calls Make-Work Bias. Consequently, ‘cuts’ are a swearword in Queensland politics, which is why the Labor Party’s campaign was so determined to invoke the hideous spectre of former premier Campbell Newman. Newman—who left the LNP in disgust over their apparent abandonment of liberal values during the Covid-19 pandemic and joined the Libertarian Party—managed to wield the proverbial chainsaw and reduce the size of Queensland’s public service by 14,000 (often through voluntary redundancies rather than sackings). Going into this election, however, the LNP was determined to distance itself from his record and promised to deliver massive savings without eliminating any government jobs at all or opposing planned pay rises. Newman, who was interviewed for this article, correctly described the LNP as pledging to simply be more efficient managers rather than any kind of genuine reformers. One cannot avoid the question: how is the LNP going to engage in the necessary cost cutting without picking up Newman’s chainsaw?
This question becomes even more pressing given the LNP has promised to retain some of Labor’s more fiscally unhinged policies, such as 50 cent fares for public transport. While this policy is being defended as an important measure to address the current inflation/cost of living crisis, such a defence is juvenile at best, since all these artificially low fares do is disperse the cost among taxpayers and/or increase public debt (which we all end up paying for anyway).
“There ain’t no such thing as a free lunch” doesn’t only apply to literal school lunch policy, it is an important economic truth that the LNP needs to heed. A more effective way for the LNP to reduce the cost of living without reducing incoming revenues would be to reduce Queensland’s regulatory burden and thus make it easier for business to be done, which in turn would increase Gross State Product. With less regulation there is need for fewer bureaucrats, but the LNP has promised to avoid any job ‘cuts’ in this term.
Nuclear is the most efficient source of energy.
Key to the LNP’s pledge to reduce the cost of living is its aim to reduce electricity costs, in part by reducing reliance on renewables. Crisafulli, on the campaign trail, rejected the official energy targets imposed by legislation, and while he still pledges Net Zero by 2050, he clearly understands renewables will not provide the reliable electricity supply necessary for Queenslanders’ quality of life. Queensland may have a lot of sunshine but the simple fact is solar and wind power will always serve only a supplementary role due to their intermittency and massive land requirements. However, on the campaign trail, Crisafulli promised that nuclear power was off the table for Queensland and that coal would be maintained. While Queensland does have a lot of coal, in the interest of decarbonisation one wonders why Crisafulli declared nuclear to be off the table. Nuclear is the most efficient source of energy currently available, Australia has plentiful uranium supplies, and there is plenty of geologically inert land on which to safely store nuclear waste. The federal Liberal-National Coalition has moved to a pro-nuclear position, but the Queensland LNP is clearly reluctant to do so. The only zero-carbon alternative to nuclear power that does not depend on building more dams (something which federal legislation makes absurdly difficult) is geothermal power, and Queensland lacks the volcanic terrain to implement that easily. And the Crisafulli government is to be applauded for dumping the Pioneer-Burdekin pumped hydro project, given that recent costings found it would have cost more than double the $12 billion promised and would have faced significant delays in its construction.
FUTURE PROSPECTS
So where does Queensland go from here? Fiscal sanity is badly needed, but the LNP promised there would be no job cuts nor any opposition to planned increases in bureaucrats’ pay. The cost of living is rising, but 50 cent public transportation will not lower that cost, and while cheaper electricity bills absolutely would, the LNP has promised there will be no nuclear power. The LNP is thus trying to cut costs without touching the lowest hanging fruit. The LNP cannot be fairly blamed for this, as it faces the democratic imperative of implementing policies capable of winning votes from electoral majorities rather than winning kudos from free market-oriented economists. The sad reality is it is constrained by Queensland’s relatively illiberal political culture. This political culture might not yet be as bad as the United Kingdom’s (where specific bureaucracies, in particular the NHS and the BBC, are pillars of the British Civic Religion just as much as the Royal Family), but it still has a strong streak of Make-Work Bias, and thus perceives reductions in the number of public-sector employees as presumptively bad. This suggests that free marketers should perhaps focus on changing the political culture at least as much as electoral politics. A good place to start would be for the LNP government to introduce economics lessons into the public school social studies curriculum. While some may protest this as ‘no different from what the left does’, the critical distinction is that economics is an actual social science, not a partisan ideology, that just happens to illuminate the fact that reality has a (classical) liberal bias at least most of the time.
Take a chainsaw to red tape instead.
Of course, we are just at the beginning of the new government’s four-year term. Perhaps it will surprise us and remove unprecedented levels of government waste and find cost efficiencies that were unnoticed before. Perhaps it will manage to reduce the State’s regulatory burden substantially, and thus actually improve economic growth and decrease the cost of living.
After all, they never promised they wouldn’t take the chainsaw to red tape. In any case, pro-market observers should calibrate their expectations appropriately to avoid serious disappointment.
Dr Andrew Russell is an economist, philosopher, and musician based in Brisbane. He specialises in Austrian, evolutionary, institutional, and public choice economics. His PhD at RMIT in Melbourne was a dissertation on the economics of casino gambling.
‘IPA Research Note: Queensland By The Numbers’ (November 2024), by IPA Research Fellow Saxon Davidson, can be downloaded at ipa.org.au/publications-ipa/research-papers.
This article from the Summer 2024 edition of the IPA Review is written by economics consultant Andrew Russell.
