ANNA Bligh has wagered her political capital by dumping Queensland's long-cherished 8.35c-a-litre petrol subsidy and embarking on a raft of asset sales in a bid to reduce debt and maintain essential services.
The Queensland Premier, who two months ago became the first woman to be elected to lead a state in her own right, yesterday announced she would defy a Labor uprising over the sale of government assets and ignore a community campaign to keep the fuel subsidy as she tries to raise $30 billion.
The politically controversial move, avoided by her popular predecessor Peter Beattie, will be watched closely in Canberra. Kevin Rudd is relying on Queensland to deliver a strong result for Labor in the next federal election, due next year to offset expected losses in states such as NSW.
Only two months after winning an early election on a platform of financial management, Ms Bligh yesterday confirmed five government-owned corporations would be sold over the next five years and the 8.35 per cent fuel subsidy abolished from July 1.
Queensland Motorways Limited, the Port of Brisbane, Forest Plantations Queensland, and the Abbot Point Coal Terminal will be privatised, as will Queensland Rail's coal business and possibly even its freight arm and regional network.
Ms Bligh – who had not canvassed such drastic measures during the campaign and briefed caucus and selected union leaders only on Monday night – said the Government expected to raise $15 billion from the sales and save $2.4billion over four years on the fuel subsidy.
While the state will lose about $280million in annual dividends from the GOCs, the decision to reduce the scope of the public sector means it will no longer have to fund $12 billion in envisaged capital works over the next five years, and realise insurance savings of about $750 million a year.
Expecting a backlash from unions, who are now warning of thousands of job losses, Ms Bligh will demand a two-year jobs freeze in affected areas and is prepared to negotiate further in a bid to prevent widespread cuts.
Motorists already fuming over increased motor vehicle registration fees, and the prospect of higher fuel prices, have been assured tolls on the privatised motorways will rise only with inflation – once the Government sets new tolls to satisfy the owners.
Ms Bligh – the notional leader of the Left who in March became Australia's first elected female premier when she led Labor to a fifth term in power – said tough times required tough decisions.
"As Premier, I don't relish having to make the hard decisions, I'd much prefer to be doing it when it is easy times," she said.
"The reality is leadership requires me to deal with the circumstances that we have in front of us. I am not a Wall Street banker, and my government are not the architects of the global financial crisis, but I am the Premier with the responsibility to deal with its fallout here in Queensland."
But the motivation for her commitment to forge ahead with the measures runs much deeper. While there will be obvious financial benefits, Ms Bligh is philosophically opposed to taxpayer subsidies for commercial coal and freight operations, believing the Government should focus on essential services such as schools and hospitals.
While she regretted having to axe the fuel subsidy, Ms Bligh said a reduction in GST revenues left her no other option and the asset sales meant the Government had money to improve public transport.
But Queensland Labor Party president and Australian Manufacturing Workers Union state secretary Andrew Dettmer yesterday said the decisions were "tragic for Queensland".
Queensland Council of Unions boss and former party president Ron Monaghan – who admitted being "gobsmacked" at the scale of the revenue-raising measures being undertaken – predicted a heated state conference at the weekend.
While in NSW an ALP revolt over planned electricity privatisation brought down former premier Morris Iemma, in Queensland the Labor Government routinely ignores party policy and it is understood only two of the 51 caucus members opposed the measures on Monday.
Nonetheless, Ms Bligh will still face hostile delegates on Sunday – she will miss the Saturday session in order to host Queensland's 150th birthday celebrations – and possibly even strike action in the coming months.
"There is no doubt that a number of trade unionists feel very passionate about this issue and oppose the government view," Ms Bligh said. "My job is to govern for all Queenslanders and to do the right thing by those Queenslanders, to put us in a position where we can keep growing, in our services like schools and hospitals that people need."
Kevin Rudd will be drawn into the controversy when he attends the conference on Saturday, but Wayne Swan last night backed the measures, saying they would allow the Bligh Government to "make vital investments in infrastructure and support Queensland jobs".
State Opposition Leader John-Paul Langbroek maintained voters were deceived at the last election and the Labor faithful since abandoned.
While not ideologically opposed to privatisation, Mr Langbroek said it was wrong to sell assets when the market was depressed, and imposing a fuel tax would impact greatly on business and industry.
The state's peak motoring bodies, primary producers, and transport groups, have vowed to fight the decision to scrap the subsidy, which they argue will have flow-on costs for consumers. Brisbane Lord Mayor Campbell Newman has also predicted higher rates.
State Treasurer Andrew Fraser yesterday said Queensland's AAA credit rating was likely to be restored within five years but, with royalty and stamp duty collections still down, the deficit – tipped to surpass $3 billion next year – would take longer to eliminate.
"But obviously, what we need to do, with decisions like we've had to take in relation to the fuel subsidy, is begin to repair that bottom line so that in the future we can chart a course back to surplus," Mr Fraser said.