Queensland will plunge further into debt – which will top $102 billion this financial year – as Premier Annastacia Palaszczuk's prolonged border closures before the October 31 election hold back its economic recovery.

With the state's tourism sector in free fall as Queensland remains cut off from NSW and Victoria, taxation revenue has been rewritten down by $6.7 billion in the budget update released on Monday, and coal royalties are expected to fall a further $1.5 billion this financial year.