State’s $1.3 billion child abuse liability put budget into deficit

Setting aside money to pay for damages meant the budget was in the red before the pandemic hit.

Dec 02, 2020, updated Dec 02, 2020

In the budget handed down by Treasurer Cameron Dick yesterday, the net operating deficit for 2019-20 was confirmed as $5.7 billion. In the last budget, a surplus of $189 million was forecast for 2019-20, revised down slightly to $151 million in the December update.

However, the Palaszczuk Government’s claim to have delivered a surplus before the pandemic is undermined by the fact it changed the statute of limitations for certain change abuse claims in October last year. That created a significant financial liability.

The decision, recommended by the Royal Commission into Institutional Responses to Child Sexual Abuse, needed to be supported by funding, which has only this week been revealed to be $1.3 billion. That made up the bulk of the non-pandemic related balance sheet changes for 2019-20 and distorted the expenditure trend in 2020-21.

“Initiatives under the Queensland Health COVID-19 Response Plan and the Cross River Rail project increase other operating expenses significantly in 2020-21 comparative to the 2019-20 outcome,” the budget documents state.

“However, this growth in expenditure is more than offset by the largely one-off provisioning in 2019-20 for historical serious physical child abuse following the removal of the limitation period for civil claims and an increase in expected historical child sexual abuse.”

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A Treasury official said the increase in Cross River Rail expenditure was scheduled and not indicative of a budget blow-out.

Separate to the $1.3 billion, which relates to physical abuse alone, the government has some $500 million set aside for claims in relation to child sexual abuse. It is also grappling with various native title compensation claims but has yet to put a figure on its liability.

The budget also provided $760,000 over two years to develop and analyse options for regulating compliance with the Child Safe Standards, options for a Reportable Conduct Scheme, and to undertake whole-of-government annual reporting on implementation in response to the royal commission recommendations.

However, a surge in complaints of abuse of older people with impaired decision-making capabilities has challenged the government, with only 60 per cent of investigations finalised within nine months despite a target of 80 per cent.

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