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Qld fuel subsidy scrapped, rail on auction block

State Government finally confirms it will scrap the 8 cents per litre fuel subsidy, along with massive asset sell-off

Queensland business will see its valuable fuel subsidy disappear, while much of Queensland Rail and other assets will be put on the auction block, under an economic recovery package announced by Premier Anna Bligh today.

After much conjecture Bligh has finally confirmed the Government will scrap the 8.3 cents per litre subsidy on petrol and diesel from July 1.

The State will also launch an unprecedented sell-off of some of its key transport assets, including the Port of Brisbane, Queensland Motorways, the Abbot Point coal terminal and above and below rail assets.

Unions had expressed outrage at any sell-off, while business and transport groups say cutting the fuel subsidy will cost Queensland operators millions of dollars.

But Bligh has told parliament the subsidy is “simply a luxury we just cannot afford”.

She says the move will save $300 million in interest savings over the next four years.

”We currently spend more than $500 million a year in our fuel subsidy program,” she says. ”But Queensland taxpayers and the motoring public are not getting value for money.”

More than 50,000 people had signed an RACQ petition in the past week to lobby to retain the subsidy. Last week industry groups including Agforce, Chamber of Commerce and Industry Queensland, Motor Trades Association of Queensland and the Queensland Trucking Association (QTA) rallied in Brisbane to launch the action.

According to QTA boss Peter Garske, small operators with between six and 12 trucks would be affected severely and could see their bills rising by hundreds of thousands of dollars.

The QTA estimates operators’ fuel costs could jump up to $15,000 without the subsidy.

Garske says there is no justification to end the scheme because Queensland’s finances are not as dire as other economies.

According to Queensland Treasury’s mid-year fiscal outlook released in January, the State’s surplus is expected to plummet to $54 million as opposed to the original figure of $809 million.

Revenue from taxes was also forecast to fall $884 million due to a slowing property market, pushing the Budget into deficit for the next four years.

The fuel subsidy was introduced following a High Court decision banning the states and territories from collecting a fuel excise. Queensland never had a fuel tax, leading it to reach an agreement with the federal government to provide a subsidy.

STATE ASSET SELL-OFF
The State fire sale will see the Port of Brisbane, Queensland Motorways (operators of the Logan Motorway, Port of Brisbane Motorway, the Gateway Bridge and its duplication project), Forestry Plantations Queensland, the Abbot Point coal terminal and Queensland Rail’s coal haulage business put on the auction block.

Bligh says selling the assets over the next three to five years will raise $15 billion to help reduce the budget deficit and regain its lost triple-A credit rating by 2013.

And more of Queensland Rail could be sold off, with the Government to investigate the sale of the company’s bulk freight and regional freight services.

The State will also negotiate with the Commonwealth to sell the regional below track network to the Australian Rail Track Corporation (ARTC), as New South Wales has done with its infrastructure network.

Bligh says this will be done “in the most appropriate, sensible way”.

Queensland unions had launched a public campaign opposing any sale of Queensland Rail and the Port of Brisbane particularly.

The Queensland Council of Unions (QCU) executive met on Friday to endorse the campaign and demand an “urgent” meeting with the Bligh Government regarding the issue, claiming privatisation would put transport workers jobs at risk.

“The QCU executive rejects as a matter of principal the sell-off of public assets,” a statement released by the union said.

“Public services are operated primarily in the interests of the people of Queensland rather than in the interests of shareholders returns.”

The QCU said it would consider action against any possible sale.

The Liberal-National Opposition is against cutting the fuel subsidy and has expressed concern over a fire sale of assets.

“There is a great danger in debt-laden governments fire-selling transport infrastructure which is vital for Queensland’s supply chains, now and into the future,” Opposition spokeswoman on transport Fiona Simpson says.

“These assets need re-investment to future proof Queensland, not a fire sale.”

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