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Revealed: Government's secret fund for victims of historical child abuse

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In the fine print of Monday’s Budget update was an unusual provision for damages payouts – potentially worth hundreds of millions of dollars a year.

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After the national Royal Commission into Institutional Responses to Child Sexual Abuse, the Queensland Government agreed to remove the limitation period for lawsuits, including for non-sexual abuse, making it easier for people to sue for damages. The legislation changed in October last year.

While it is now harder to mount a defence in such cases, including for former state-run institutions, the government never put a figure on its own potential liability, except to say “the reverse onus amendments may result in more cases involving the State being litigated”.

The 2019-20 mid-year budget update, handed down in December, did not add any detail, but it has now emerged the government believes its exposure is so significant it needs to make provisions in the budget for 2019-20. It may also be concerned about unrelated litigation.

Normally, litigation is listed as a contingent liability, unable to be quantified until or unless a case is settled, with final costs often hidden in other government expenditure. For example, the Consolidated Fund Financial Report for 2019-20, tabled in parliament today, referred to the Department of Justice and Attorney-General requiring an additional $20 million in funding last financial year. The only explanation was that it was “funding to meet a litigation payment, partially offset by adjustments related to judges’ long service leave entitlements and victims assistance claims”.

But in detailing the broader movements since the 2019-20 mid-year budget update, the government has added a couple of zeros to parameter adjustments. The parameter adjustments relate to expenditure or revenue movements “largely of a non-policy nature,” and usually swing by tens or hundreds of millions of dollars at most.

The COVID-19 Fiscal and Economic Review released by Treasurer Cameron Dick revealed a $2 billion hit to the Budget in 2019-20. It listed a parameter adjustment of $1,933 million for last financial year and $1,288 million in 2020-21.

The only specific difference to previous years’ adjustments – COVID-19 costs were largely detailed elsewhere – was that the government was “providing for serious historical physical child abuse claims, an increase in historical sexual abuse claims and other pending litigation”.

That contributed to the anticipated net operating balance for 2019-20 dropping from a $151 million surplus in the mid-year review to a $5,898 million deficit, and 2020-21 forecasts revised downwards from a $234 million surplus to a $8,136 million deficit.

A spokesman for Treasury said the Government was making provision for anticipated payouts. Questions to other ministerial offices had yet to be answered at time of publication.

 

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