MYTHBUSTERS #2- Sale of Assets« Curtis Pitt MP :::State Member for Mulgrave Page 1 of3
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MYTHBUSTERS #2- Sale of Assets
MYTH: The Government all of its assets.
FACT: We aren't. In our total asset base is over billion.
We are selling Forestry Plantations Queensland, Queensland Motorways Limited, Port of Brisbane Corporation, Abbot Point Coal Terminal, and the above and below rail coal business of Queensland Rail. The proposed sales will deliver proceeds of around $15 billion.
But the government will still own a large number of businesses, including:
• Queensland Investment Corporation
• Energex
Powerlink
Erg on
• CS Energy
• Tarong Energy
Stanwell Corporation
Sunwater
SEQWater
• LinkWater
• WaterSecure
• Townsville Port Corporation
• Far North Ports Corporation
• North Queensland Bulk Ports Corporation
• Gladstone Port Corporation
Queensland Rail's passenger network.
We also continue to own billions of dollars worth of social infrastructure such as hospitals and schools.
MYTH: The Government is off businesses that are
tr.r.von>orfhe five businesses in about million in dividends and tax for the last financial year.
However, over the next five years the businesses will require around $12 billion in investment, some of which will be spent on QR's operations in other states.
http://www.curtispitt.eom.au/2009/09/02/mythbusters-2-%E2%80%93-sale-of-assets/ 5/03/2013 MYTHBUSTERS #2 - Sale of Assets « Curtis Pitt MP ::: State Member for Mulgrave Page 2 of3
That's $12 billion:
• that will need to be borrowed
• that can't be invested in hospitals, schools or highways.
that the private sector can fund, saving the taxpayer.
MYTH: There are no protections for workers' jobs with these asset sales.
FACT: Award workers will have their wages and conditions guaranteed and transfers will occur with all entitlements
All enterprise bargaining agreements will be honoured for the full term at the time of sale, or for at least a further two years from sale -whichever is the longest.
MYTH: The Government isn't even to the shut out.
FACT: We have already started detailed meetings with unions about the workforces in these businesses.
We've already offered to extend the protection to three years in Forestry Plantations Queensland as part of the negotiations- which include the AWU, QPSU, CFMEU and AMWU representatives.
MYTH: There's no way that these asset sales can the sale be in the interests of workers.
FACT· Privatisation does not always mean a reduction in worker numbers.
There are a number of examples around the world, like Canadian National- the national railway of Canada- which has gone from strength to strength since it was privatised.
Right here in Australia, the Qantas workforce has grown by 16 per cent since it was privatised.
Some businesses need to grow beyond what the taxpayer can afford and they need funding to remain competitive and commercially viable.
MYTH: The government is paying investment bankers millions of dollars to sell these assets.
FACT: Put simply, we are doing this to get the best price for taxpayers.
When you sell a house, you pay a commission to a real estate agent to advise on the sale and get the best price.
The same for trading in shares- a broker is paid by commission. The fees for advisors are generally in the order of 1 per cent- as an example, the costs in the airport sales process were just over 1 per cent.
The Government all
FACT: We aren't.
The only parts the government has decided to sell is the above and below rail (the track and the trains of Queensland Rail's coal business.
The government is investigating the financials of other parts of QR, but has guaranteed that QR Passenger will remain in public ownership -the track and the trains.
QR's other business include, bulk and regional freight, a national intermodal business with facilities in other states and retail services.
The government is undertaking a due diligence examination of the business to assess whether it is in the interests of QR, the workforce and taxpayers to get private sector investment to grow the other parts of QR's operations.
http://www.curtispitt.eom.au/2009/09/02/mythbusters-2-%E2%80%93-sale-of-assets/ 5/03/2013 MYTHBUSTERS #2 - Sale of Assets « Curtis Pitt MP ::: State Member for Mulgrave Page 3 of3
Public transport (QR Passenger) is not suitable for running as a business, and it is not being examined.
MYTH: The rail tracks are all
all the track will remain in
The government considered transferring the rest of the track network to the Federal Government owned rail company the Australian Rail Track Corporation- to create a single national publicly owned company for the major rail networks of the country.
MYTH: Coal must be secured two new coal contracts in New South Wales.
FACT: It's true that it has secured these contracts.
But this is the perfect example of why the Government has decided to sell the coal business.
These new contracts to haul coal in New South Wales means OR will need to invest more than $300 million in assets and infrastructure across the border.
The Queensland taxpayer is the ultimate owner that provides the funds for investment- and if money is being invested in New South Wales trains and infrastructure, it's not being invested in Queensland.
Choices have to be made and the choice here is between hauling coal in New South Wales and hauling freight in Western Australia, versus investing in infrastructure needed right here in Queensland.
Even though OR's dividend last financial year was over $150 million, it needs around $7 billion more over the next five years to fund new assets to keep it commercially strong.
That's like having a rental house that brings in $20 000 in rent which needs $700 000 spent on it.
The interest on the $7 billion needed to be borrowed would cost more than $400 million per annum, and about $1 billion of the investment would go interstate.
This entry was posted on Wednesday, September 2nd, 2009 at and is filed under Myth buster Series ...... •
http://www.curtispitt.eom.au/2009/09/02/mythbusters-2-%E2%80%93-sale-of-assets/ 5/03/2013