THE man holding Queensland's purse strings says the state has two choices - higher taxes or an asset sell-off.
Treasurer Tim Nicholls said selling government-owned businesses was among 155 recommendations the Cabinet would discuss as they poured over the Costello Commission of Audit.
He said the only way to return to a AAA credit rating was to reduce debt.
"The practical way of doing that as suggested by the commission is to sell government-owned businesses," he said.
"That's something the government is considering and discussing.
"Queenslanders need to have a discussion about the choices they want to make - do they want to have increased taxes and charges or sell down government businesses to reduce debt so we can continue to deliver services."
Mr Nicholls said the Government was still anticipating a fiscal surplus by 2014-15 but it would need a 1% surplus a year for the next 50 years to achieve a AAA rating.
The Government is expected to release former Australian Treasurer Peter Costello's Commission of Audit Report next week but the Cabinet met at the Executive Building on Wednesday to discuss which recommendations they will pursue or debate with the public.
Premier Campbell Newman publicly declared on Tuesday that he was "in the main" against asset sales.
He promised he would not sell the Port of Gladstone or any electricity assets without asking Queenslanders for their opinion.
But Mr Newman said Queenslanders could not "just put our heads under the pillow and pretend it's going to go away".
Tourism Minister Jann Stuckey said she had read the whole 1000-page report and it was "fairly bleak reading".