Former federal treasurer Peter Costello.
Queensland Treasurer Tim Nicholls noted Peter Costello’s “difference in opinion...over the last two years” over the former federal treasurer’s criticism of the Abbott government debt tax, but stopped well short of criticising the architect of the state’s commission of audit.
Mr Costello led the audit of Queensland’s finances, which was commissioned shortly after the LNP government came to power in 2012.
One of its recommendations was a “budget deficit levy” of at least $100 on all ratepayers. It was quickly ruled out by the government, which chose to slash the public service by 14,000 jobs and cut services and spending instead.
Queensland Treasuer Tim Nicholls Photo: Harrison Saragossi
Earlier this week, Mr Costello wrote in his regular News Corp column that he considered the proposed Abbott-government debt levy to be a mistake.
“Last week the government floated the idea of raising tax as a way of “sharing the pain” so everyone would shoulder the burden of fixing the budget,” Mr Costello wrote.
“It is important to note this is a political argument.
"The proposed tax “levy” has no economic benefit. It will detract from growth by reducing consumption. It will produce no interest rate reduction and, if it lasts four years and raises $10 billion, the most it could save would be $400 million in annual interest — hardly enough to touch the sides of the annual $12 billion government financing requirement.”
Mr Nicholls, who has been given the job of selling another of the state’s commission of audit recommendations – asset sales – to a hostile electorate, said while he had not read all of Mr Costello’s column, he “did notice the difference in opinion, though over the last two years”.
He put that down to the difference between the state’s economic woes and those faced at a federal level.
“I think in the context that he was talking about, the amount of the levy that was proposed would not be enough to solve that problem,” Mr Nicholls said.
“The problem at a federal level is obviously of a magnitude greater than here in Queensland, so I think it was the effectiveness of the proposal rather than the proposal itself that he was talking about. I think he was questioning whether that would be effective
“But maybe that is a question better directed to Peter Costello. It would be a very brave person who would put words in his mouth.”
The state government will announce its plan to “tackle Labor’s $80 billion debt” on June 3.