Qld budget will now go $3 billion into the red next financial year

Queensland has forecast a $3 billion budget blowout as a result of the cost-of-living relief the state government is delivering.

Treasurer Cameron Dick has announced the June budget will forecast a deficit of about $3 billion for 2024-25 financial year.

Queensland Treasurer Cameron Dick.Credit: AFR

It is set to ease to less than $1 billion the following year.

“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,” Dick said in a statement on Tuesday.

The budget blowout comes amid major state government spending on cost-of-living measures, housing and health.

The treasurer says the measures are necessary so dipping into the bottom line is a worthwhile investment.

“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,” Dick said.

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

That was on the back of coal royalties supporting Queensland’s post-pandemic boom which had been forecast to boost revenue by $9.4 billion over five years.

This upcoming financial year was also previously forecast to remain in surplus.

Dick revealed in April keeping the budget in balance would be “difficult” with state debt forecast to reach $188 billion in four years.

Forward estimates with preliminary forecasts suggested that by the 2027-2028 financial year Queensland’s net debt could reach $73 billion.

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

Despite the pressures on the bottom line, the state government has invested significantly on housing, cost of living and health over the past financial year and is forecast to do the same in the upcoming budget.

The investment includes the “Big Build” plan to deliver one million homes by 2046 costing the treasury’s coffers $3.1 billion.

There is also the $2.5 billion cost-of-living centrepiece of the budget – which has been factored into the 2023/34 finances – to provide $1000 in energy rebates to all Queenslanders from July.

AAP