Coal provides sugar hit in mid-year Queensland budget review

Extra revenue from coal royalties has provided a short-term sugar hit to the Queensland state budget, with the government's net surplus for the financial year more than tripling from $146 million to $485 million since the budget was handed down in June.

Treasurer Jackie Trad, on the first day of her first full week in the role, released Queensland's main mid-year economic health check-up, the Mid Year Fiscal and Economic Review on Monday.

Treasurer Jackie Trad and Under Treasurer Jim Murphy at the MYFER release on Monday.Credit: Dan Peled/AAP

“Surplus is up, debt is down and Queensland will continue to lead the nation in strong jobs growth,” Ms Trad said.

The review projects economic growth of 2.75 per cent for the 2017-18 financial year, rising to 3 per cent for the following year.

The economic health check predicts strong jobs growth in 2018 and the 1 per cent jobs growth estimated in the June 2017 Budget has been upgraded to 2.25 per cent by June 2018.

“In fact there have been 13 consecutive months of jobs growth in Queensland,” she said.

“One hundred and thirteen thousand jobs have been created in the 12 months to November 2017 and we are leading the nation in jobs growth over that period.”

Ms Trad highlighted a strong trade and export performance by Queensland businesses in the past 12 months.

“In the year to October 2017, Queensland exports were valued at $71.4 billion,” she said.

“This is the highest trade value on record and great news for Queensland companies, producers and job seekers.”

Unemployment is predicted to be 6 per cent into 2018-19, down from 6.25 per cent.

Inflation is creeping up from a very low year average of 1.75 per cent to 2.25 per cent by December 2018.

However, in the longer term, the economic review shows a predicted $766 million decline in revenue from coal royalties by 2021, after the extra $414 million received this financial year.

Also, overall revenue from all mineral royalties and land taxes will drop by $500 million in that period.

Ms Trad said those figures did not show Queensland was vulnerable in this area.

“We want to make sure where we are not putting ourselves in a position where we are over-predicting the price of coal,” she said.

“We do think that – based on that independent consensus - that (coking coal) prices will come back (from $US161 per tonne) to about $120 per tonne.”

Meanwhile full government borrowings, including the general government sector and the government-owned corporations, is $71.2 billion by June 2018 or $767 million less than the debt predicted in the June 2017 budget.

By the end of the four-year estimates in 2020-2021, complete government borrowings is predicted to be $80.84 billion, or $305 million lower than the 2017-18 Budget predicted.

Queensland’s “debt to revenue” ratio is predicted to decline to 58 per cent at the end of the 2017-18 financial year, which the economic review describes as “significantly lower than the peak of 91 per cent in 2012-13”.

The government’s election promises, valued at $1.4 billion, will be paid for partly by the new taxes announced in the last few days of the campaign and by removing “duplication” in the Queensland public service.

Ms Trad said previous treasurer Curtis Pitt saved $1.3 billion in public service “reprioritisation” over the previous three years and said she was confident of being able to do the same.

She paid tribute to Mr Pitt for his work in guiding the Queensland Budget until she replaced him as treasurer one week ago.

“I’d like to thank him for all his work in getting the review to this position and his leadership in the treasury portfolio in the past three years,” she said.

Shadow treasurer Tim Mander said his "first response" after seeing the review for one hour was that it was a typical Labor document where "spending is up, taxes are up and debt continues to increase".

Mr Mander said increasing coal royalties  were helping the government's bottom line.

"This government has benefitted from good luck, rather than by good management, by the increase in coal royalties," he said.

Mr Mander questioned the surplus, despite the economic review showing surpluses were also predicted for the next three years, and said the bulk of the jobs growth was "in part time jobs."

"That is a concern," he said. "People want full-time jobs."

During the 2017 election campaign, Labor announced a $200 million expansion to its Works for Queensland program to fund 700 programs with regional councils to generate jobs.