Better budget bottom line after proposals scrapped

Savannah Meacham |

Queensland has recorded a sunnier outlook after scrapping a number of proposals.
Queensland has recorded a sunnier outlook after scrapping a number of proposals.

Queensland’s bottom line has returned a better-than-expected forecast for debt and deficits despite record spending on cost of living measures.

The budget handed down on Tuesday revealed a $2.6 billion deficit for 2024-25, a $400 million improvement on forecasts before the papers were released.

Treasury forecasted the state will further improve the deficit to $515 million in next year’s budget before a return to surplus.

Despite the higher deficit, the budget papers revealed better than forecast bottom lines with general net debt reaching $59.8 billion in 2027-2028, $13 billion lower compared to forecasts in April.

The government also previously predicted that general borrowings would reach $128 billion but budget papers confirm it will be $17 billion better at $111 billion.

Deputy Premier Cameron Dick said the net debt to revenue ratio forecasts in 2024-25 is 31 per cent compared to 88 per cent in NSW and 163 per cent in Victoria.

He attributed these better-than-expected figures to the government’s scrutiny over accepting proposals.

“We said no to things,” Mr Dick said.

“We have to be very careful about public expenditure … which is why we have reshaped our fiscal position as tightly as we can, focusing on the things that matter.”

Mr Dick did not elaborate on the proposals that were pushed aside by government but budget papers show health, cost of living and education are what mattered.

Handful of coal
Coal royalties clawed in billions of dollars in revenue for Queensland. (Kelly Barnes/AAP PHOTOS)

The billions of dollars in extra spending are promised to be funded by progressive coal royalties in Queensland, however, forecasts show the revenue from the mining tax is slowly dwindling. 

Coal royalties will bring in $6.2 billion in revenue in 2024-25, a nearly 40 per cent fall on previously unprecedented gains.

Budget papers said changes in commodity export volumes, global prices and improving supply conditions are the cause of the falling royalties.

Although there was a cost of living splurge in Mr Dick’s fifth budget, the government has committed to cutting costs elsewhere in their own spending.

This will be delivered through the Smarter Spending, Better Jobs Plan – a repackaging of a plan introduced during the financial pressures of COVID-19 – to save $3 billion over four years.

“These savings will be a major part of underpinning the budget’s return to surplus,” Mr Dick said.

The task force will reduce the government’s travel, advertising, and accommodation expenditure as well as decrease the use of external consultants, contractors and labour hire.

Mr Dick reassured there would be no public sector job losses as a result of the task force.

“We spend at least $500 million a year on leasing offices, spend $3 billion in payments to contractors and consultants so these are areas where we will ask agencies to find a responsible level of savings,” Mr Dick said.

However, the budget showed government expenses remain on the rise – by 2.5 per cent – thanks to a number of the promised programs. 

These include higher operating costs at Queensland Health to address demand and support investment, the need to fix the state’s housing supply by delivering the Homes for Queenslanders plan and meeting student needs under the National School Reform Agreement.

There is good news for Queenslanders in the tax department, with residents paying $1052 less than NSW per capita.

Taxation does however remain a key contributor to the state’s economy, bringing in a forecast $24.7 billion in this budget from gambling, land tax, car registration, and more.

This is a rise from the previous year by 9 per cent.

“We remain committed to being a low tax state,” Mr Dick said.

AAP