The Queensland racing industry is facing serious financial problems and has been referred to the auditor-general, Premier Annastacia Palaszczuk has revealed.

The Government yesterday sacked the boards of all racing codes and stood aside Racing Queensland's chief executive in the wake of an inquiry into the greyhound live baiting scandal.

Ms Palaszczuk said interim administrator of Racing Queensland KPMG's Ian Hall, who was appointed only yesterday, has reported issues with the organisation's budget.

The first draft of Racing Queensland's (RQ) budget showed it was on track to record an $11 million loss by the end of the financial year.

It would swell to a loss of $21 million in 2016.

"It's become immediately apparent that Racing Queensland's budget appears to be in poor health," she said.

"Mr Hall has found that Racing Queensland has serious cash flow problems which alarm me and will alarm all Queenslanders.

"That further justifies my Government's decision to shake up the racing industry and start with a clean slate.

"This situation is unacceptable."

Ms Palaszczuk also announced she had appointed retired Justice John Muir as the interim chairman of a new body to oversee the industry.

"Very clearly, the racing industry needs to start from scratch," she said.

The State Government formed the Queensland Greyhound Racing Industry Commission of Inquiry in response to a Four Corners investigation in February that exposed shocking animal cruelty in the greyhound industry.

Vision from a greyhound property in Churchable, 90 minutes west of Brisbane, showed greyhounds mauling live pigs and possums who had been strung onto the lure arm.



The vision led to 23 Queensland greyhound trainers being warned off of racetracks for life.

Earlier today, RQ said they would not be making any comment.