Cheques and imbalances: Made in Queensland but at what cost?

Why is the Queensland Government handing out money to publicly listed companies, asks Robert MacDonald

Feb 15, 2021, updated Feb 15, 2021
Treasurer Cameron Dick has delivered his mid-year Budget forecast. (Photo: AAP Image/Darren England)

Treasurer Cameron Dick has delivered his mid-year Budget forecast. (Photo: AAP Image/Darren England)

How could you possibly object to something called the Made in Queensland (MIQ) program, which the Palaszczuk Government says is creating hundreds of jobs around the state?

I’ll give it a shot.

But first, what is it?

The scheme, launched in the first term of the new Labor administration, is, to quote from the website, “a Queensland Government initiative supporting small to medium manufacturers increase international competitiveness, productivity and innovation via the adoption of new technologies, and to generate high-skilled jobs for the future.”

Sounds reasonable enough, even when expressed in the over-egged language of a government letting you know it’s boldly navigating a way to a future beyond farming and mining.

But boil it down and MIQ is really just a grants program that uses public money to buy jobs.

Since 2017, it has handed out $46 million in matching grants to 85 advanced manufacturing projects around the state.

The Government claims “these projects are expected to create more than 1,100 jobs over five years and generate more than $100 million in private sector investment.”

And better yet, “around 40 per cent of the 85 projects (are) being delivered in regional Queensland, which will create more than 380 jobs over the next five years.”

The Government likes the idea so much that Treasurer Cameron Dick committed a further $15.5 million to the program to fund another – the fourth – round of grants in his latest Budget, delivered on December 1.

So what’s not to like? Here’s a government program producing real results and jobs right across the state.

It all depends on how you think government should be spending our money, a theme I’ve raised in previous columns.

You might think it’s a really good use of public funds to give a company a quarter of a million dollars to help it install some new equipment, which, in turn, lets it hire a few more workers.

But as I wrote a few weeks ago when discussing another Queensland Government grants program – its $25 million hydrogen industry development fund – why is the government giving money to private companies to develop projects that those companies presumably see as having some commercial benefit.

Or conversely, if the planned project is so uncommercial it needs a government grant to get it going, is it really worth the effort and risk for the company involved?

I think it makes sense for government to help companies, particularly small companies in regional Queensland, turn their expansion plans into bankable projects.

But I’d argue that rather than just handing over some cash, the government should work with the company to see what other non-financial support it could provide – tax relief, infrastructure support, training or whatever.

And even if it decides to provide financial help, why a grant? Why not a low-interest loan to be repaid when the new project is profitable?

Well, grants are very attractive politically. What politician doesn’t like handing over a cheque?

Or you could argue that giving a $100,000 grant to engineering works in Roma, for a job-creating expansion, is a more effective and measurable way to support regional economic development than, say, hiring a part-time public sector industry assistance officer.

And perhaps it is, but a scan through the list of companies and projects and companies so far funded by the MIQ program – tabled in State Parliament last week – shows it’s not just small, regional businesses getting the money.

Big successful Queensland companies have also received large MIQ grants.

Toowoomba-based and publicly listed Wagners, with revenue of $252 million last financial year, has received more than $2 million of MIQ grants to help one of its divisions “invest in advanced robotics technology and waste-minimising lean production technics.”

The company has said the Government’s support would “help the company enhance its productivity, profitability and international competitiveness., bringing more job opportunities up the range.”

All well and good, but back to the basic question; why is the Government giving a public company – which can always raise money from is shareholders through capital raisings – our money so that it can be even more profitable for those very same shareholders?

And why would chemicals company Orica, with global sales of more than $5 billion last year, need a million-dollar grant so that its Helidon operations could install some “robotics and automated soldering technology.”

Elsewhere, Ormeau-based PWR Holdings, a listed company, which has carved out a brilliant niche supplying cooling systems to Formula One and NASCAR racing teams, has received $2.3 million for new high-tech equipment.

To the north, Bundaberg Brewed Drinks, with estimated turnover of more than $300 million, has received more than $500,000 of MIQ funds to upgrade its brewing, bottling and warehousing systems.

Each of these grants has, inevitably, been accompanied by a Queensland Government media release crowing about its wonderful job creation efforts.

But at $46 million and counting, is the bill really worth the claimed outcome, especially when you think how else the Government might have spent that money – on who knows, more doctors and nurses perhaps, or pay down some debt?

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