PREMIER Campbell Newman has scrapped the Queensland Premier's Literary Awards in a move that has shocked and outraged arts and publishing identities.

The Courier-Mail reports the Premier declined to comment on his move but a spokesperson issued a statement this afternoon which said cancelling the awards was part of the LNP Government's plan to control government spending and lower the cost of living for Queenslanders.

"In light of this, the Queensland Government has decided not to proceed with the Queensland Premier's Literary Awards in 2012 which will save Queensland taxpayers $244, 475," the statement said.

The move comes during the National Year of Reading and sent a poor message to young people about the importance of literacy, according to last year's Queensland Premier's Literary Awards winners, Brisbane writer Michael Gerard Bauer.

"Those books get put in front of young readers and they encourage kids to read. And they also put reading up there as something people respect and think has some value because it has awards associated with it," he said.

"This is a backwards step."

Brisbane Writers Festival director Jane O'Hara said she hoped scrapping the Premier's Literary Awards triggered a state, national and international debate.

She said the Premier's decision reflected the beliefs of all Queenslanders.

"What does this say about the way Queenslanders view the value of reading and writing?" she said.

"That should be a concern to us all."

Read more about Queensland's new Premier scrapping the literary award at the Courier-Mail