Debt blowout as revenue takes massive hit
Taxpayers should brace for Queensland’s debt to balloon to more than $100 billion as the state’s coffers take a bashing from reduced revenue amid the COVID-19 pandemic.
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TAXPAYERS should brace for Queensland’s debt to balloon to more than $100 billion as the state’s coffers take a bashing from reduced revenue amid the COVID-19 pandemic.
The Courier-Mail can reveal a massive reduction in payroll tax revenue has blown a more than $400 million hole in the budget.
The shortfall joins the almost $300 million the Government has lost from gaming tax revenue, while it’s set to collect almost $200 million less than was forecast for the waste levy.
How COVID-19 will hit the Qld Budget
Economists have warned debt will increase, with Gene Tunny saying, “You’d be confident that it would get past $100 billion in the next few years.”
It’s still not known what Queensland’s revised debt level is, with the Government having cancelled the April Budget amid the pandemic.
It’s currently preparing to deliver a COVID-19 Fiscal & Economic Review in September.
The previous estimate had Queensland’s debt reaching $91.8 billion over the forward estimates.
Treasurer Cameron Dick said the Government had collected $408 million less in payroll tax revenue between January 1 and 31 May this year, compared to the same period in 2019.
The figure includes payroll tax relief that was provided to businesses.
“The payroll tax relief included refunds, payment holidays and deferrals for eligible businesses as well as an exemption for the Commonwealth Government JobKeeper payments,” Mr Dick said.
Mr Dick said the Government was faced with a choice.
“We can cut our way to recovery or, we can choose jobs, infrastructure and growth to rebuild our economy,” he said.
“But it won’t be debt for its own sake – it will be for the express purpose of getting people back to work, and getting our economy back on track.”
Queensland will take on extra debt to respond to the COVID-19 crisis.
Mr Tunny, who is the director of Adept Economics, said Queensland’s debt would soar past $100 billion.
He said while he understood why the Government was delivering a COVID-19 Fiscal & Economic Review instead of a full budget this year, he said: “It would have been good to have much more information out there to what they’ve provided so far.”
“It’s been since December last year since we’ve had a budget update.”
Chris Richardson of Deloitte Access Economics said reducing the unemployment rate meant spending more.
“It would be absolutely dumb to respond to those falling revenues by trying to cut spending,” he said.
