The figures seem rosier than they did only six months past when the previous budget was handed down after being delayed by COVID, with Treasurer Cameron Dick arguing on Tuesday that Queensland’s market was”roaring back to life” and was larger than it had been prior to the pandemic.
“I am not ordering any coffee mugs yet — but Queensland will return in black,” he said, before bringing the Palaszczuk government’s seventh budget as its next treasurer.
“When you protect the health of your people, then jobs will grow.
“This financial year, Queensland’s market will expand by 3.25 per cent — more than twice the national growth rate”
In Mr Dick’s first budget, he disclosed that a pre-COVID excess of $234 million for 2020-21 had transformed into a $8.63 billion deficit that would ease to $1.39 billion years later.
However, things seemed much better on Tuesday, using a $3.8 billion deficit in 2020-21 turning right into a $153 million excess by 2024-25.
Mr Dick said that before he became Treasurer, each Palaszczuk government funding had delivered an excess.
However he said the government made a deliberate decision to put the funds into deficit to”back jobs” and there would be no”reckless rush to surplus”.
“Today’s budget demonstrates that our decision has paid off our shortages are narrowing since jobs are coming back,” he explained.
Mr Dick said the national, NSW, Victorian and Queensland authorities all went into deficit to respond to COVID-19 but maintained only Queensland was returning to surplus.
But it’s still a whopping $25 billion higher than was forecast for this year in the 2019 budget, well ahead of the pandemic ravaged the world’s health systems and market.
By 2024-25, total debt is predicted to reach $127 billion.
But, Mr Dick said”debt is not a dirty word” and Queensland did not have a debt problem, saying he wouldn’t apologise for using it to shield people’s wellbeing and jobs.
“In the long run, debt may well rise again, to react to another crisis, to deal with a disaster, or to build the infrastructure of the state,” he explained.
The state was also able to enhance the status of its net debt, which will hit over $42 billion by 2024-25, through a revaluation of its Titles Registry — formerly transferred to the Queensland Future Fund — that has been revised from $4 billion to $7.8 billion.
At $64.2 billion, spending, also called expenses, was anticipated to be only marginally lower in 2020-21 compared to predictions in December.
General government sector debt including departments like health and education — has been 55.08 billion in 2020-21, about $6 billion lower than predicted at the previous budget.
That is the equivalent of over $6 million in interest every day to service that debt.
Limitations on coal exports sting
Despite Queensland’s economy rebounding, many risks remained, budget papers warned, including the global vaccine rollout, continuing geopolitical and trade tensions — especially between the US and China — and struggles from Australia’s trade relationship with China.
China’s limitations on Queensland’s coal exports have been supposed to remain important in 2021, with a few comfort in 2022, but impacts would be felt within the next four years.
It had been a more pessimistic view than was held in December, when it was believed connections would normalise in 2021-22.
There were improvements in earnings, such as state taxes and GST, with government industry revenue expected to be seven per cent, or $4 billion, greater than predicted in December, meaning Queensland did not have to borrow as much.
However, the global economic downturn and Chinese export constraints weighed on coal costs and volumes, with exemptions to complete $1.75 billion in 2020-21, 50.4 per cent lower compared to the preceding year.
Treasury officials assumed there wouldn’t be any prolonged lockdowns, journey bubbles could be created from 2022 onwards and the international border would stay closed to most passengers before mid-2022.
Mr Dick said the authorities $3 billion savings and debt strategy was on track, with $750 million in savings located in 2020-21, including from lodging, advertising, IT and the death of 33 senior executives through natural attrition.
However, it will be a record health budget, with operating funding increasing by over 13 per cent over two decades, and also a $2 billion Hospital Building Fund declared to deal with growth pressures.
Greater than $900 million will be spent building 10 new schools, with five in the Ipswich area, three in Logan, one in Redland Bay and yet another on the Sunshine Coast.
Mr Dick revealed the government would abandon its fiscal principle to maintain increase in the public support lower than population growth, a movement hinted in December’s budget.
There are now 238,673 full-time public servants and the state’s wage bill was expected to come in at $27.47 billion in 2021-22 — 4.5 per cent higher than the preceding year.
Unemployment is predicted to fall from 7 percent annually to 5 percent by June 2025, lower than expected, and Queensland has regained all jobs lost during the catastrophe.
Mr Dick said the state would be contested from the greatest interstate migration from the country, reducing the involvement rate of different states and raised Queensland’s.
There’ll also be $29.3 million over two years to get the Tourism Department for initial preparations for a future Olympic Games in 2032 if Queensland is effective in its bid.