Client Update: Queensland Government land holding review
1 May 2013
In brief: In its response to the 'Costello audit', the Queensland Government has signalled that it will look to rationalise its existing asset base. Partner Tony Davies and Senior Associate Anna Vella look at the Government's response to the review with its focus on under-utilised state assets.
In February 2013, we reported that the Queensland Government was undertaking a review of its current land holdings, ahead of an expected land divestment program. The Government has now provided its response to the Queensland Commission of Audit's recommendations about land asset management.
On 30 April 2013, the final report of the Queensland Commission of Audit (the Audit Report) was made publicly available. In relation to asset management, the Audit Report found that:
- The Queensland Government's land and fixed assets totalled $222 billion in 2010-11, of which $171 billion is held by the general government sector. The value of land and fixed assets in Queensland is larger than in any other state and almost one-third of the Australian total.
- With a higher asset base, Queensland incurs higher maintenance costs and a higher depreciation expense.
- It is essential that the State's assets are managed efficiently and effectively to ensure enhanced value for money. This requires better utilisation of existing assets, including the rationalisation of surplus or under-utilised assets, and the adoption of alternative models of ownership and/or management of the assets.
On 30 April 2013, the Queensland Government released A Plan – Better Services for Queenslanders, being the Government's response to the Audit Report. In relation to the asset management recommendations for land and property issues, the Government accepted that the existing asset base should be rationalised with a view to:
- achieving better value from existing assets;
- reducing asset costs by disposing of, or consolidating use of, under-utilised assets;
- examining and comparing office accommodation ownership and leasing arrangements, to achieve the most cost effective solution; and
- achieving more effective maintenance of current and future assets.
The Government accepts that there is a need for stronger central management of land and property and the Government Land and Asset Management Unit (established under the Economic Development Queensland Board) is progressing this agenda. As reported in February, Economic Development Queensland is the State Government's streamlined business unit for residential, urban and industrial development that has a primary focus of facilitating economic development throughout Queensland.
The Government response to the Audit Report is consistent with our expectations that the ongoing asset review process will lead to the disposal of land identified as underperforming or surplus to the government's needs. Detail has not yet been released as to the 'innovation' which may surround any land disposal – which may in turn reduce development risks and accelerate market delivery.
We will continue to report on these development opportunities.
- Michael GravesPartner,
Ph: +61 3 9613 8814
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