Queensland's Ongoing Challenges - to early 2008

 

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 Good News
Economy

Global growth has been heavily dependent on US consumption and China's production - running large current account deficits and surpluses respectively. The US economy is shutting down (as indicated by collapse of consumption / consumer confidence / housing / car - durable goods sales / production indicators / employment - all of which will further reduce equity values). China may also be on the way to a hard landing. GDP growth is slowing (9% down from 12%) - accompanied by sharp falls in cars; homes; construction; manufacturing indicators. Domestic orders have fallen faster than exports. Manufacturing growth is slowing - though still over 10%. Many factories near HK will close. China needs 9-10% growth to absorb labour force growth - so 5-6% is a hard landing and the actual outcome could be worse. China depends on exports. Though this is only 12% of GDP, real investment (excluding housing / infrastructure) is 45% - and about half of this is in manufacturing capacity. China's aggregate demand depends on maintaining export-based growth. The US has been main destination - but is now collapsing (0% down from 20% pa growth). US retailers hoped that downturn would be slight - and so placed large 2008 orders - which now will lead to huge overhang. Thus orders in 2009 will be down sharply.  At the same time other advanced economies that were growing as US contraction started are heading for recession. With a fall in exports, China's investment will also fall - because of large excess capacity from past years. China has been reducing interest rates - but this may do no good if return on capital would not justify investment. Corporate loan demands have already fallen sharply - and banks are refusing to lend. Fiscal expansion might help - though this is limited because (a) various recent factors have already eroded central government budget (b)  a hard landing would increase the cost of non-performing loans in mostly-still-public banks. Poor investment quality has been hidden by growth in recent years - and the cost of cleanup could be huge (c) recent surges in revenues have been matched by spending - so falling revenues would not necessarily be matched by reduced spending and scope for fiscal stimulus. Total government dent could be much higher (eg over 50% of GDP) than revealed. Thus scope for fiscal stimulus could be limited.  (d) fiscal stimulus to date has been modest - and in the event of a hard landing it would be physically difficult to suddenly shift resources from tradable goods to (say) infrastructure. China could easily slow to growth less than 7%. US contracting is rapidly accelerating. A hard landing in China will also hurt emerging market economies in Asia and on resource suppliers. Sharp falls in commodity markets and Baltic Freight index show that demand for commodities / industrial inpus is collapsing. An ugly and protracted economic contraction is likely in 2009 (Roubini N. The Rising Risk of a Hard Landing in China: The Two Engines of Global Growth U.S. and China are Now Stalling , 4/11/08)

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Transport

The 7 km Tugan bypass cost $543m, and will reduce driving times by at least 30%. It includes a 334m underpass under the airport runway (Weston P. 'Bypass is an underpass too',  SM, 1/6/08)

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Infrastructure

Governments now tend to pick and promote infrastructure projects on the flimsiest of bases. In the past there used to be a rigid process of cost - benefit analysis (Forsyth P., 'Decisions based largely on politics risk lemons', FR, 5/5/08).

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Child care

The flood of child abuse notifications is stretching resources and creating a bureaucratic social nightmare. Child protection system is failing. Departments are casting their nets ever wider in case children slip through. In South Australia over past 18 months 1/4 of children have been notified, and in NSW this has been 20%. Over the past 10 years the number of children in out-of-home care has doubled, and have cases of substantiated neglect (while reported neglect has trebled). Child protection has become increasingly bureaucratic (Wynhausen E., 'Coming apart at the seams', A, 19/4/08).

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Public Services

State departments are spending billions with little explanation. The  Auditor General found annual reports to be incomplete, ambiguous and lacking in relevant information (Odger R and Wardill S 'Auditor blasts shoddy work', CM, 18/4/08).

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Social justice

100,000 people are homeless every night in Australia - with 36,000 youth (12-25). Emergency accommodation is inadequate. There is a diminishing supply of affordable housing. 1/3 of young people leaving state care are case managed into homelessness. The rapid increase of numbers of children in state care means that homelessness could escalate even further (Christiansen M. 'Homeless disgrace', CM, 8/4/08).

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Aboriginal peoples

Aboriginal people are locked out of the real economy by government education policies which give them no access to secondary education (Robinson N 'Aborigines locked out of the real economy', A, 1/4/08).

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Political system

Former Queensland premier consulted the Integrity Commissioner before accepting a post-politics job (Beattie P 'Public servant of private sector', A, 24/3/08).

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Electricity supply

Electricity generators are concerned that they would be excluded from compensation for in a national emissions trading scheme - and could be left with $bns of stranded assets (Warren M 'Power companies fired up about compensation', A, 22/2/08).

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Public Finance

Queensland's AAA credit rating could be lost if state does not control growth of its running costs which are rising 12% pa. Cost escalations partly reflect labour shortages (MacDonald R., 'State credit rating at risk', CM, 21/1/08).

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Style of Government

Former senior figures in Queensland ALP (Brian Courtice and Greg McMahon have publicly called on voters to back Coalition because they are concerned about 'bully boy' tactics of AWU - which strike fear into ordinary ALP members (Roberts G. Ex-ALP heavies endorse coalition, A, 23/10/07).

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Political leadership

36% of Queenslanders believed that Anna Bligh will be a better premier than Peter Beattie. She also has supporters amongst government insiders. But how much difference can a leader make. Dr Rae Wear (U of Q) argues that a leader can make a huge difference - noting ALP's transition from Beazley to Rudd. Bligh is more measured / less spontaneous than Beattie. Bligh will be more predictable - and will work more in the back room rather than in the media. She will carefully monitor government. Public servants have noted a change - but government members are the most enthusiastic. Ronan lee MP speaks of a rejuvenated government.  Bligh is more consultative than Beattie, and others feel freer to express their views. Bligh (like Beattie) wants to engage the regions - and is an unashamed Queenslander. Ideology will drive Bligh more than it drove Beattie - a pragmatist. She will act on convictions about government intervention in social policies. She is from the Left faction. However her commitment to regionalism and even political judgment can be questioned.   (Williams P., 'Bligh much more than Beattie lite', CM, 6-7/10/07)

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Education

Professor Cunningham's attempt to place QUT controversy in context is flawed. It suggests that Laughing at the Disabled just happened to QUT - rather than something that QUT is doing to academics and the disability community. QUT recently faced a demonstration by disability community. Two academics were suspended after complaining about a PhD project - after a review set up by QUT VC with a handpicked chairman and staff. Coaldrake also decided the penalty and that there would be no appeal. The academics were victims of workplace mobbing - and the case will go down as one of most severe attacks on free speech by a university. Cunningham spoke of the good news about QUT - but did not mention the Creative Industries' faculties' budget problems (Laver B. 'University on course to totalitarianism', CM, 13/7/07).

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Police

There is concern that police have paid prisoners to give false statements to secure convictions (Wardill S 'Police jail link rattles Beattie', CM, 20/6/07).

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Water

It is becoming harder to protect water quality in SE Queensland - as officials hope to drain dams (affected by toxic algae and higher metal concentrations) to 1% of capacity (Thompson T 'Dam quality a challenge', CM, 18/5/07).

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Growth Management

Queensland's good economic times are boosted by 15000 interstate migrants annually. Budgets are boosted by property taxes, but the stream of crisis in recent years shows that Queensland's ability to deal with rapid population growth is uncertain. Michael Matusik argues that most migrants come from poorer suburbs in Sydney and Melbourne. He also disputes the 1500 per week figure - suggesting that it had been 1800 per week a few years ago but was now down to 1400 - because of problems with leadership and affordability in Queensland. Government's strategy for growth involves major infrastructure investment and a regional development plan that aims to focus growth on western corridor. The latter has attracted property industry criticism - which suggests that constrained access to land is driving up prices. Premier hopes that migrants will be happy to settle near Ipswich - but few are willing to do so. Many are disillusioned with problems in SE Queensland and have moved further north. Problems in recent years in electricity, health and water all reflect a failure to invest. (Ludlow M and Allen Lisa 'Let's all live in Queensland', FR, 12-13/5/07).

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Local Government

Proposals for amalgamation of local councils because of a lack of financial viability has been criticised on the basis that (a) this presents only a political not a financial gain (b) Victoria had a severe amalgamation process and its councils' position is now worse than in Queensland and (c) the real problem is revenue and cost factors that can't be fixed by structural changes. There is a requirement for injection of federal and state funds. There are infrastructure backlogs. Government's case for reform contains defects. It is based on PwC research which concluded (from examination of councils in southern states but none in Queensland) that 40% of councils are non-viable. The ALP is seen to get a political advantage out of reducing councils in which Nationals candidates go to political 'pre-school' (McCarthy J 'Shock tactics', CM, 21-22/4/07).

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Political Opposition

Queensland's Liberal Party seems to be in a similar position to the ALP in the 1970s - a shadow of its former glory; lacking relevance; and rent by factionalism (Williams P., 'Amateurish coup attempt had no hope', CM, 31/3/07).

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Health

Queensland hospitals risk being swamped due to patients' unhealthy lifestyles (Miles J. 'Walking time bombs', CM, 23/2/07)

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Crime

Organised crime is increasing its grip on prostitution in Queensland - despite government efforts to control this trade (Griffith C 'Black trade in sex', CM, 22/1/07).

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Judicial system

A review of DPP's decision concerning Palm Island death-in-custody case is to be conducted by Pat Shannahan (retired chief judge of district court) and Peter Davis (Brisbane Barrister. Shannahan's involvement has led to claims of conflict of interest because of his involvement in three man panel that recommended appointing DPP in 2006 (Koch T. 'Ex-judge in Palm death case helped pick DPP', A, 26/12/06).

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Dysfunctional society

Bob Hawke made an election pledge to prevent children growing up in poverty - but this didn't happen - because of disastrous social trends. A massive increase in ex-nuptial birth's meant that 25% were born out of wedlock and thus in the numbers of children growing up in welfare dependent job-less families escalated. The women having these children were mainly less educated and on lower incomes who could not afford to provide for them. Such children start their lives with a disadvantage. Marriage and Caste in America (by Kay Hymowitz) argues that family structure underpins the growing divide between haves and have-nots. Children with two parents have significant advantages (eg two incomes to support them in their developing years (Arndt B 'Educated guess at folly in sole parenting', CM, 8/12/06).

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Environmental management

Problems such as drought and exotic fauna are merely part of the ongoing difficulties which Europeans have had in coming to grips realistically with Australia (Crotty M 'History's tough lessons still have relevance today', CM, 20/11/06).

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Buying Industry

Queensland Government is to review its business incentives scheme - because of the view that it is no longer effective (Ludlow M 'Qld incentives may be revised', FR, 6/11/06).

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Government owned corporations

Energex CEO has resigned as a result of improper share trading (Marx A 'Energex bosses facing audit', CM, 17/10/06).

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Parliament

Queensland's parliament has not significantly improved since Joh Bjelke Peterson's time. Government has a healthy majority and faces an outclassed and bewildered opposition. Almost half of question time is taken up with time wasting 'Dorothy Dixers'. There have been many changes improving democratic process in Queensland since 1980s - but Question Time is not one of them. Question Time is meant to keep governments accountable, but because of increase of party discipline it is exploited by majority party. There are problems everywhere but the abuse of Question Time is worse in Queensland than elsewhere (Williams P. 'Who stole Question Time', CM, 10/10/06).

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Cost blow-outs

The lack of an audit system prevents the Queensland public from knowing the true cost of public works. Budget blowouts are very common on projects in SEQ. Unlike the situation elsewhere performance audits are not conducted to provide guidance for future work (Thompson T 'Millions lost in cost blowouts', CM, 6/10/06).

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Freedom of information

FOI is all but dead in Queensland (Doyle J - former superintendent in charge of Queensland police Service FOI - 'FOI stripped and beaten', CM, 4/9/06).

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Tourism

Australia is not well-regarded internationally as a tourist destination - and many jobs in the tourism industry are thus at risk (Allen L 'So where the bloody hell are they ..', FR, 2-3/9/06).

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Regional difficulties

Poor planning and chronic water shortages are killing off SEQ's farming sector. Hundreds of farmers a year are leaving land that is being replaced by tightly packed housing developments (Thompson T 'Dying breed', CM, 29-30/7/06).

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Smart State

Queensland is likely to make major R&D spending commitments. The Smart State strategy was seen as more spin than substance when first launched. It reflects government commitment to spend on skills and innovation to boost state's economy - and it is broadening from one traditionally associated with mining, agriculture and tourism. Strategy values R&D but also emphasises the need to commercialize ideas. Uni of Queensland's Institute for Molecular Biology was first major research institute to benefit - and has developed products that have resulted in 11 spin off companies. UQ Vice Chancellor argues that Smart State strategy has been spectacularly successful in this respect - though the university still faces other problems. QUT's Institute for Health and Biomedical Innovation has also benefited from government funding - and has 400 staff and has attracted talented researchers. UQ Vice Chancellor describes Smart State strategy as the benchmark against which other states need to measure themselves (Nickless R 'All jokes aside, money talks for the Smart State', FR, 5/6/06).

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Financial System

Rules that have been set up affecting venture capital investments in Australia are much more complex / restrictive than those elsewhere (Clout J 'A bureaucratic nightmare', FR, 16/5/06).

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Training

Proposals for 24 federally funded colleges to end skills gap have run into trouble with some being scrapped because proposals were not up to standard, while others have been delayed (Maiden S 'New tech colleges in crisis', A, 25/4/06).

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Industrial relations

Business is as concerned about the complexity of new IR arrangements as unions are about the limits to their influence (Tingle L 'IR reforms can be a real can of worms', FR, 24/3/06).

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Correctional Services

There are better and cheaper ways of dealing with crime (eg early intervention programs) than building super jails - like the 4000 bed facility being planned for SEQ to cope with expected 90% increase in prisoners over the next decade as magistrates get tough on crime (Homel R 'Build bridges not super jails', CM, 13/2/06).

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Ambulance Service

Almost 1/3 of Category 1 calls for ambulance services are not answered in 10 minutes - indicating that many lives are left in danger (Cole M 'Delays threaten lives of patients', CM, 31-1/12/05).

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Employment

The depth and innovation capacity of professional workforce is critical to Australia's economic future productivity growth. However there is a serious engineering and accounting skills shortage - and workforce aging threatens the existence of some small but important disciplines. Reliance on overseas professionals is difficult given increased competition for them (Clarke B 'Where have all our skills gone', FR, 12-13/11/05).

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Racing

The Daubney-Rafter inquiry into Queensland's racing industry will be remembered as a lost opportunity for thorough reform of an industry where rule breaking and trampling on the innocent have been accepted norms. The inquiry was limited by narrow terms of reference set by the state government. The report ultimately gave the Minister an out for mismanaging of a major industry. High initial expectations of the inquiry were not fulfilled (Thompson T., 'Still important questions left to be answered', CM, 7/6/05)..

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Land clearing

Satellite photos have revealed large areas of apparently illegal land clearing by Queensland primary producers (Morley P 'Shock at extent of clearing',  CM, 23/5/05).

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Drought

As farmers meet to discuss a financial crisis resulting from drought, forecasters warn that prospects of another El Nino event (a drought inducing phenomenon) have increased markedly (Williams B 'Where only depression grows',  CM, 19/5/05).

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Population

Queensland's population growth has slowed but is likely to reach 4m by end of year. Over 1000 interstate migrants arrive weekly; refuse to move inland. Queensland accounts for 1/3 of national population increase (Ludlow M 'Queensland population set to hit 4m', FR, 18/5/05).

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Constitution

Constitutional expert urged Queensland's premier to keep hands off the Office of Governor - in relation to IT and financial management functions at Government House. The Governor's office needs to remain independent to fulfill its constitutional role (Houghton D 'Independence of governor in jeopardy',  CM, 19/4/05).

Great Barrier Reef

Queensland Premier suggested that warnings about potential destruction of Great Barrier Reef in 20-30 years were alarmist. Professor Ove Hoegh-Guldberg argues that advanced global warming will bleach and kill some of the reef no matter what is done - while build up of carbolic acid in oceans would add another blow (Passmore D 'No need for alarm over reef - Premier',  SM, 13/2/05).

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Brain Drain

Australia must persuade its most talented people to return home if a quality lifestyle is to continue to be enjoyed - according to Professor Peter Doherty. Talent is attracted to be opportunities. Lost talent is reflected in reduced quality of university training. To attract talent it is vital to have a strong education system. Lack of job opportunities is seen as main problem in attracting talent. The issues are larger populations, governments spending lots of money on particular sectors and good support for universities from endowments (Livingstone T., 'Brain drain threatens prosperity', CM, 4/12/04).

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Associations

Instability in Commerce Queensland has caused problems for its money making arm - Queensland Apprenticeship Services. Turmoil emerged after CQ president Heilbronn was re-elected for third term (Parnell S., Turmoil at business group', CM, 1/12/04).

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Resource / Industrial Investment

Queensland Resource Council suggested that exploration in Queensland is stalling because geological information is outdated / incomplete (Walsh L 'Exploration hit because of outdated maps', CM, 28/10/04)

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Magnesium project

Brisbane stockbroker threatens to blow the lid on Queensland's financial services industry after backing $200m class action over collapse of AMC. Former ABN Amro Morgan's client adviser is understood to be highly critical of firm's internal culture and its role in AMC's capital raisings. Investors claim they were misled about high risk nature of project. AMC collapsed when cost blew out and it could not find another equity partner. Some promoted project as government guaranteed.  (Owen R 'Broker to blow lid on AMC debacle', CM, 31/8/04)

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Fire Hazards

Queensland faces worst fire season for 50 years because low humity and dry terrain (Moore T 'State a tinderbox waiting to explode', CM, 16/8/04)

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Inflation

Import prices are starting to rise - leading to concern that long period of low inflation may be drawing to a close (Uren D. A, 27/7/04)

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Daylight saving

Premier Beattie wanted Queensland to cease being butt of southern jokes - through Smart State concept involving emerging industries such as biotechnology and aviation. Queensland is now described as 'engine room' of Australian economy. But lack of daylight saving is seen by many in business community as holding Queensland back. (Ludlow M 'Curtains safe: Beattie shuns daylight saving', FR, 26/6/04).

Families Department

Peter Forster speaks of changing departmental culture - in same way that Fitzgerald spoke about changing practices in police force. Forster was deeply involved in implementing Fitzgerald's recommendations - and now has to implement CMC's proposals for Protecting Children through changing Families department. Nothing can be achieved by a 'quick fix' 9eg appointing a few more detectives). Staff can't deal with massive problems in dysfunctional families. There are some 4000 children in care, and 30,000 notifications annually (180 per day) - each of which requires subjective judgments by front-line officers. If the department takes children it must be able to be better parents - but this can't happen. About 400 children can't be placed - because there is nowhere for them. Staff spend only 10% of their time in child care - with reports and other matters taking the rest.  For staff to provide care they must be better paid and provided with child care support. The goal is to provide 'better parents' for children (Koch T 'Forster recommends culture revolution to foster better parents', CM, 5/6/04)

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Cultural development

Brisbane's new Lord Mayor emphasizes a 'can do' approach but may not cope with the cultural agenda. Directions undertaken by Community Policy Committee (under David Hinchcliffe) may be neglected. Hinchcliffe's interest in the arts have energized Brisbane's creative networks.  Perhaps Lord Mayor has not yet understood that such investments bring opportunities. BCC will continue to support Creative City Plans - which includes funding for Powerhouse. Creative City projects (festivals, community events) will struggle if not adequately funded. Brisbane could return to its reputation as big, lazy, easy-going country town. There is an opportunity to gain a creative culture - but Lord Mayor might let opportunity slip (Sorensen R. 'Can-do but is he creative', CM, 5/6/04)

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Energy policy

State Government's decision to build Kogan Creek coal fired power station adds fuel to fire destroying Queensland's future. 5m tonnes pa of greenhouse gas pollution will result. Earlier in the year Queensland had halted broadscale land-clearing. Kogan Creek is like an extra 1.3m cars on road. The only way to reduce threat of global warming to Queensland's economy is to cut emissions. Queenslanders had impression from clean energy plan that coal stations would not proceed - at least without exhaustive efforts to find alternatives. Climate change scientists have strengthened their warnings. Coal threatens an alternative role for sugar industry. Reducing energy demand (as in California) is another alternative. (Reynolds A. 'Pull the plug on cheap, dirty power', CM, 28/5/04)

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Winegate

Up to five people may have lied to officials and police in relation to Winegate affair - yet CMC found that there was no official misconduct (Sweetman T 'Don't you worry about that', SM, 25/4/04)

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Law Enforcement

Queensland remains the only state in which police lack phone-tapping powers (Parnell S 'Still hung up on phone tapping', CM, 10/1/04)

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Swimming Pools

Tough changes to legislation (which require fencing before pools can be filled, and have led to a decline in the number of inspectors by raising their public liability risks) has been claimed to lead to very large delays in completion of pools, and require contractors to break laws (Bartsch P., 'New laws create pool chaos', CM, 10/1/04)

Drugs

The amphetamine market in Queensland has exploded as existing laws hamper police efforts to target mobile drug labs, according to top law officer (Callinan R 'State in grip of drugs crisis', CM, 26/12/03)

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Air safety

Pilots and air traffic controllers argue that Australia's new National Airspace System will increase risks of mid-air collisions (Stewart C 'Ghost riders in the sky', A, 29-30/11/03)

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INACTIVE SUBJECTS

Abuses in state institutions

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Air quality

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Arts

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Autopsies

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Boarding Houses

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Bribie Island bridge

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Brisbane River footbridge

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Built environment

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Business initiative

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Busways and traffic

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Cairns Base Hospital

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Commercial-in -confidence provisions

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Construction industry

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Corporate governance

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Criminal justice

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Currency

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Dingo attacks

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Electoral fraud

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Electrical safety

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Ethics

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Export development

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Fake IDs

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Gambling

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Great Artesian Basin

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Gun laws

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Health Rights Commission

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Honours

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Hospital waiting lists

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Indigenous councils

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Marketeering

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Moreton Bay environment

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Number plates

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Piracy

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Policy development

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Prostitution

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Public Health

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Salinity

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Savings

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Special education

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Sporting Facilities

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Superannuation

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Tugun Bypass

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Traffic noise

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Vehicle Safety

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Workers compensation

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Workplace issues

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