Economist Says Queensland’s Decision to Run $3 Billion Deficit Purely ‘Political’

Queensland Treasurer Cameron Dick says the budget is likely to be in deficit when it's handed down next month. Jono Searle/Getty Images

Queensland’s 2024-25 budget is expected to be released with a $3 billion (US$1.9 billion) deficit on June 11, and additional forecasts predicting a $1 billion shortfall the following year.

Treasurer Cameron Dick said the deficit was necessary to prevent families from suffering during the cost of living crisis.

“While our government would like to see a surplus in the next two financial years, that will not come at the cost of Queensland families running deficits on their household budgets,” Mr. Dick said in a statement on May 21.

Housing and health have been the focus of the government’s spending.

In the Wide Bay region, in central Queensland, Labor recently announced a “record” $1.2 billion investment in the new Bundaberg Hospital, and confirmed social housing in the coastal town of Hervey Bay.

Labor’s “Big Build” plan aims to deliver more than a million new homes by 2046, at a cost of $3.1 billion.

“If we have to borrow to deliver our cost-of-living measures, then that is what we will do, but we will do so in a way that keeps inflation as low as possible,” Mr. Dick said.

The government managed to deliver a $4.3 billion surplus in 2021/22, and a $13.9 billion surplus in 2022/23.

That was on the back of higher taxes on the state’s coal exports, which are forecast to boost revenue by $9.4 billion over five years. This upcoming financial year was also previously forecast to remain in surplus.

Yet Shadow Treasurer David Janetzki was critical of Labor’s approach to budgeting.

“Never before has a Queensland government spent more, borrowed more or taxed more, and left Queenslanders with less to show for it,” he told The Epoch Times in an emailed statement.

“Labor has overseen record debt, interest costs, and revenue rivers of gold at the same time as there are record numbers of crime victims, homeless and record numbers of Queenslanders waiting on the hospital ramp.”

Economist Criticises Decision to Run Deficit

Chief economist at the Australian Taxpayers’ Alliance John Humphreys was sceptical of the Labor government’s running deficits.

Having previously worked for the state Treasury, Mr. Humphreys said it was a political move to win over voters before the election in October.

“The move by the Queensland Labor government to trash the Queensland budget is purely political,” he told The Epoch Times in an email.

“There is no good economic or policy reason for them to run up large budget deficits over the coming years, so if it happens then it can only be explained by political desperation in the lead-up to the 2024 Queensland election.”

The Labor government changed leaders following the tragic alleged murder of 70-year-old Vyleen White after an attempted carjacking by four youths.

However, polling numbers and recent state by-election results have suggested the incumbent government could face a wipe-out at the next vote.

Meanwhile, forward estimates suggest that by the 2027-2028 financial year, Queensland’s net debt could reach $73 billion.

Gross government debt that financial year could also reach $128 billion and when combined with borrowings, total debt could reach $188 billion.

The Queensland budget stands in stark contrast with that of Western Australia, which recorded its sixth consecutive surplus earlier this month due to high commodity prices.

The WA government announced a $3.2 billion spending splash on health in its 2024-25 budget, as well as a $12.1 billion on infrastructure.