Costello audit report 'dishonest'

4pm: AN accountancy battle has broken out between the Queensland Commission of Audit authors and those who wrote scathing reviews of the publication.

The Queensland Council of Unions commissioned former University of Sydney professor of accounting, Bob Walker and his wife and economist Dr Betty Con Walker to conduct an independent review of the Independent Commission of Audit, headed by former Howard Government treasurer Peter Costello earlier in the year.

The Costello audit found Queensland was heading for a $100 billion deficit by 2018-2019 if urgent changes were not put in place.

The State Government has constantly referred to the audit to justify sweeping job and service cuts in the public sector.

The Walker review of the audit, released on Friday, claimed the publication was "intellectually dishonest" and failed to observe basic accounting standards.

It stated the Costello audit failed to properly analyse Queensland's $28 billion in assets against liabilities and used its own figures rather than official Australian Bureau of Statistics data.

LNP claims - that the former government had to borrow to "support the budget" - were flatly contradicted by cash flow statements which Costello ignored, the Walker report said.

QCU President John Battams said the Walker report exposed the attempt of Mr Costello and Premier Campbell Newman to "hoodwink" the Queensland public on the state's finances.

But the Commission of Audit authors have refuted claims they exaggerated Queensland's budget deficit and said terms such as "ideological, stunt and mischievous" used in the Walker Report were political observations not the language of serious accounting analysis.

A Commission of Audit statement released on Friday said its analysis was based on key financial metric used by Australian governments and credit agencies.

It also pointed out the credit agency Standard and Poors 2011 report found Queensland's budgetary performance was the weakest of all Australian states.

 

EARLIER: The Costello audit of Queensland's finances the State Government has been touting to justify widespread job cuts has been challenged in a scathing independent review.

The Queensland Council of Unions commissioned former University of Sydney professor of accounting, Bob Walker and his wife and economist Dr Betty Con Walker to conduct an independent review of the Commission of Audit headed by Peter Costello earlier in the year.

The 113-page Costello audit found Queensland was heading for $100 billion deficit by 2018-2019 if urgent changes were not put in place.

The State Government has constantly referred to the audit to justify sweeping job and service cuts in the public service.

The review of the Costello audit, released on Friday, claimed the publication was "intellectually dishonest" and failed to observe basic accounting standards.

It said the Costello audit failed to properly analyse Queensland's $28 billion in assets against liabilities and used its own figures rather than official Australian Bureau of Statistics data.

LNP claims - that the former government had to borrow to "support the budget" - was flatly contradicted by cashflow statements which Costello ignored, the Walker report said.

Prof Walker accused the Costello report of ignoring the impact of natural disasters on Queensland's deficit in favour of blaming excessive growth in the public sector.

Mr Costello's findings of employee expenses growing too quickly and too far were contradicted by findings in the Walker report, which found expenses had remained "fairly stable" over an 11-year period.

QCU President John Battams said the Walker report exposed the attempt of Mr Costello and Premier Campbell Newman to "hoodwink" the Queensland public on the state's finances.

"It shows that their document is hardly worthy of the term 'audit' and disproves any link between Queensland's debt and the number of public servants," Mr Battams said.

"We will ensure that all Members of Parliament receive a copy of the report so they can better identify the mistruths and inaccuracies rolled out by Costello and Newman."

More to come...



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