Budget verdict: Queensland’s rosy outlook comes with an asterisk

The state government has delivered a budget where it seems to be making some effort to take on some of the headaches they have faced in recent months, writes Jack McKay.

OVERVIEW

This was a Budget that painted a much rosier picture of the future than the dire predictions and forecasts we saw last year. It’s a Budget that projects a better jobless rate in the years to come. It’s a Budget that plots a surprising return to surplus. And it’s a Budget where the government seems to be making some effort to take on some of the headaches they have faced in recent months. But there is still a while to go before Queensland recovers from this pandemic. And, if COVID-19 has taught us anything, an unforeseen crisis could strike at any time – turning those rosy projections on their head.

Treasurer Cameron Dick has delivered a positive budget that could bring Queensland back into surplus. Picture: NCA NewsWire / Dan Peled

PUBLIC SERVICE

The government’s decision to maintain its public sector hiring freeze for non-frontline staff came as a surprise. It was initially supposed to last only 12 months, but now it will run through for at least another year. FTE positions in the public service grew by 0.56 per cent between September, 2020 and March, 2021. But the growth of the public service wages bill is still a major challenge. It’s tipped to increase by 4.5 per cent in just the next financial year alone.

DEFICIT

Queensland will claw its way back to a $153m surplus by 2024-25 if the Budget books are to be believed. But it’s so razor thin, it’s worth questioning if we will actually get there. It would not take much to knock this surplus back into deficit.

HEALTH

Health has become a major headache for the government in recent times, as the opposition chips away at their record. There will be $2bn borrowed for a Hospital Building Fund in what they say is a bid to relieve the pressures on the health system – but we don’t even know where all of this money is going and a significant chunk could be allocated beyond the forward estimates. The government will be hoping that the pressures on the system are addressed well before then, otherwise it could cost them votes at the ballot box.

HOUSING

Housing advocates have spent the past few months upping their calls for the government to do more to grow the number of social and affordable housing across the state. This has become a serious challenge for the government, after the number of applications on the social housing register deemed to be of very high need jumped by a staggering 50 per cent in just the 12 months to September last year. The government seems to be listening, unveiling a $1bn Housing Investment Fund, as well as another $1.9bn spend over four years. The government claims they will now help deliver at least 6,300 new homes over the next four years adding to what was already promised..

A Queensland Olympics could drive infrastructure investments after the completion of Cross River Rail.

INFRASTRUCTURE

The government’s spend on infrastructure in the four years from 2021-22 will be about $52.2bn – down from the $56bn spend in the four years from 2020-21. It raises questions about what’s in the pipeline once the government’s signature Cross River Rail project finishes up. The 2032 Olympics – if we secure the sporting spectacular (fingers crossed) – will mean we will need to up our infrastructure investments.

EDUCATION

The government announced funding for a slew of new schools to be opened in the coming years as they deal with growing student numbers. This is one part of the Budget that seems to be actively planning for Queensland’s population boom, with schools set to be built in high growth areas, such as Ipswich and Logan.

JOBS

According to the Budget books, Queensland is tipped to have a 5 per cent unemployment rate by 2024-25. And it’s expected to drop to 5.5 per cent by the 2022-23 financial year, a surprising turnaround from where we were last year in the midst of a pandemic. But time will tell if we will actually reach these rosy projections. The 5 per cent prediction for 2024-25 puts us slightly ahead of the projections that Victoria has made for themselves. According to their Budget books, their unemployment rate by then will be 5.25 per cent.