QLD Budget 2020-21: Budget certainty in an uncertain year

QLD Budget 2020-21: Budget certainty in an uncertain year

Treasurer Cameron Dick this afternoon handed down the 2020-21 Queensland State Budget. While this was Treasurer Dick’s first budget, this is the sixth budget that the Palaszczuk Government has delivered.

Building on the Government’s coronavirus theme of ‘unite and recover’, the Budget seeks to chart the pathway out of the current pandemic and related recession while continuing to safeguard the health and safety of Queenslanders. The Budget outlines how the Government plans to deliver on its campaign promises made to voters ahead of the October 2020 poll, which saw the Palaszczuk Government win its third election and the first fixed four-year parliamentary term in the state’s history.

The Treasurer used his speech to Parliament to insist that this was a budget that “contains no surprises” and “delivers certainty in a year that has been anything but certain”. As expected, the Budget does not include any new or increased taxes and all major funding commitments were made in the lead-up to and during the election campaign.

Highlighting the ongoing economic impact of the pandemic, Queensland’s economy is forecast to grow by 0.25 per cent this financial year and unemployment is expected to have peaked at 7.9 per cent in the September quarter. Despite these challenging conditions, the State’s economy is forecast to return to growth of 3.5 per cent in 2021-22, before easing back to 2.75 per cent in the later years of the forward estimates. The Treasurer attributed the Government’s successful handling of the COVID-19 health response as the key driver of the state’s recovery. However, the Budget forecasts assume that there will be no further substantial outbreaks of the virus in Queensland, borders will remain open, and a vaccine will be available by the end of 2021.

As foreshadowed by the Treasurer, the Budget confirms record borrowings and deficits across the forward estimates. With total debt projected to reach around $130 billion in 2023-24, the Treasurer defended the State’s fiscal position by saying it is a “pro-growth and pro-business budget,” with borrowing the only viable option available to government to strengthen the Queensland economy during a time of crisis. The Treasurer stressed that debt levels will be comparably lower than NSW and Victoria.

The Budget also confirmed that total revenue is expected to be $12.3 billion lower than forecast at the Mid-Year Fiscal and Economic Review in December last year. The Government had also previously revealed it would borrow an extra $4 billion over the forward estimates to fund election commitments.

The Budget includes a significant investment in infrastructure of $56 billion over four years, which is estimated to directly support 46,000 jobs this financial year. To this end, the Budget includes $1.5 billion to continue construction work on Cross River Rail and $3.4 billion for ongoing investment to fund major upgrades to the M1 Pacific Motorway and the Bruce Highway.

The Budget also features a focus on health and education infrastructure, with $1.6 billion pledged in capital works for hospitals across Queensland and $1.7 billion for the Building Future Schools Fund, which includes $346 million for four new schools opening in 2022. The Treasurer said the Budget delivers essential public services, with funding for 5,800 extra nurses; 1,500 additional doctors; 1,700 allied health professionals; and 6,190 new teachers.

Looking ahead

Budget estimates is scheduled to run from 7 to 15 December. This will be one of the first big tests for the Palaszczuk Government’s reshaped Cabinet, with newly-appointed Opposition Leader David Crisafulli eager to hold the government to account and find early wins for the LNP’s new-look frontbench.

For further information on key QLD portfolio measures, please refer to GRACosway’s detailed briefings:

KEY PARAMETERS

Total debt to peak at $130 billion in 2023-24
$56 billion invested in infrastructure over the forward estimates
$12.3 billion reduction in revenue over the next four years
$8.6 billion deficit
Gross State Product (GSP) to rise by 0.25 per cent, before growing by 3.5 per cent in 2021-22
Employment to rise by 1 per cent

FURTHER READING