The Queensland Labor government is mulling borrowing billions against the return of toll roads to state hands in the 2050s in a pre-election $11.2 billion giveaway budget that economists warn risks stoking inflation and the need for interest rate rises.

Ratings agency S&P Global warned the government’s “waning fiscal discipline” in Queensland had eroded the state’s debt rating headroom, as Treasurer Cameron Dick handed down a budget filled with handouts aimed at winning over voters but which will plunge the state further into debt.