Public sector bill to soar as ‘deceitful’ Labor smashed for budget hell

A collapse in mining revenue, rising public sector wages and Labor’s “deception” has completely blown Queensland’s budget out, according to treasurer David Janetzki.

Queensland Premier David Crisafulli and Treasurer David Janetzki during parliament question time in Brisbane. Picture: Supplied

• Janetzki: ‘Where’s the missing $70bn?’

Queensland’s public sector wages bill will crash through $40bn within four years and could soar higher while a collapse in mining revenue and “deceitful” spending heaps pressure on Premier David Crisafulli to deliver election commitments.

An update to the state’s budget, released by Treasurer David Janetzki on Thursday, reveals the government will spend $2.2bn more than projected in June - largely due to “addressing funding shortfalls” of frontline services.

Mr Janetzki, who dubbed the mid-year fiscal and economic review “Labor’s last budget update”, faces significant pressure to deliver lower debt as promised during the campaign.

The update reveals Queensland’s public sector wages bill will hit $42.4bn in 2027-28 - $3.9bn more than Labor forecast in June.

It is based on predictions wages will rise 2 per cent, however unions are now in talks for a 5 per cent increase.

Treasurer David Janetzki has a battle on his hands. Picture: Richard Walker

“The employee expense increase comes back to the unfunded commitments of the former Labor government… (they) promised more nurses, teachers, police officers, but none of them were funded,” he said.

“It is the most deceitful outcome we could possibly imagine.

“It’s a full exposure of their debt, deficit and deception.”

Mr Janetzki said some $3bn in savings announced by then Treasurer Cameron Dick in June were not delivered and were removed from his budget update.

Despite the revelations, Mr Janetzki maintained the government would take a “calm and methodical approach” to the June budget and denied he would cut services or raise taxes.

The state’s economic growth will slow 0.5 per cent to 2.5 per cent this financial year.

The unemployment rate is also expected to fall 0.5 per cent next financial year.

Major revenue streams royalties and GST are forecast to dramatically decline by $2.7bn (5 per cent), including a $421.4m fall in coal royalties.

The state government maintains it can save $6.9bn in expenditure on consultants and contractors, which will be put towards its $4bn worth of election commitments.

The state has also allocated its $1.2bn share of the $9bn Bruce Highway funding.

Mr Janetzki has walked back an election commitment to keep debt below $171bn and now declared the bar is now $217bn forecast under Labor.

Queensland Premier David Crisafulli will work closely with Mr Janetzki. Picture: Supplied

He declared it would be a “serious challenge” to return the budget to an operating surplus.

The state government has ruled out cuts to services, asset sales, royalty and tax hikes to draw down debt.

Mr Janetzki conceded the state’s credit rating will be affected.

“Knowing what we know now, with debt per capita tracking to be the worst in the country, it is highly likely that we will not just have an outlook to upgrade, but it’s highly likely we will have a rating downgrade too,” he said.

The Treasurer claimed the $9bn public service wage increase is due to Labor’s failure to budget for additional frontline workers.

“We are committed to delivering the services that Queensland needs, and we need more nurses and teachers and police officers and firefighters,” he said.

“They simply weren’t funding the services that were necessary.”

Mr Janetzki assured the government’s election commitments were “rock solid” alongside the forecast 6.6 per cent increase in operating expenses.

Pressed on how debt would be reduced, Mr Janetzki said he would rely on the advice of creditors.

“We’ve started our plan. We’re working through it,” he said.

“A key part of our plan is listening to our credit rating agencies and talking with them and talking to them seriously.”

$217bn debt bomb: Qld budget to be in worse shape than Victoria by 2028

Debt will hit an eye-watering $217bn by 2028 – the equivalent of $39,082 for every person – as explosive government spending puts Queensland deeper in the red than any other state or territory.

Per capita debt is tipped to hit $39,082 within four years and become the nation’s highest – worse than economically troubled Victoria.

The shocking figures will be revealed by state Treasurer David Janetzki during his first mid-year budget update on Thursday.

Total non-financial public sector borrowings are on track to hit $217.8bn by 2027-28, up $45.8bn from the $172bn projected by then-treasurer Cameron Dick just seven months ago.

The budget update will also predict that the “rapid acceleration of borrowing” projected will see Queensland go from having the lowest levels of borrowing per capita of the major states to the highest over the next four years.

Former Treasurer Cameron Dick.

Queensland Treasurer David Janetzki.

Changes to government revenue has not yet been revealed.

Mr Janetzki told The Courier-Mail the mid-year-budget update was upfront and frank with Queenslanders “about the financial challenge we have inherited”.

“It is the true account of Labor’s last budget update. This is the future we must avoid,” he said.

The update will also reveal operating surpluses of $900m in 2026-27 and $2bn in 2027-28 will be replaced with two years of $9.2bn deficits - the largest in Queensland history.

The forecast deficit this financial year will be $6.9bn.

Labor’s infrastructure program - dubbed the ‘big build’ has again increased - by $22.6bn to $129.9bn.

Mr Janetzki has not indicated how the government will deal with the ballooning debt in his first budget on June 24.

The government maintains it will not cut services nor introduce new taxes and during the election campaign the LNP also pledged debt would be lower.

The Treasurer said the level of “debt and deception” was unimaginable.

“When I was sworn in, Queensland Treasury warned me about the significant and growing debt burden,” he said.

“The Finance Minister and I asked Treasury to determine every hidden project blowout and every underfunded department service delivery commitment.

“The last few months have revealed the truth of Labor’s debt legacy and funding cliffs for essential services.”

Shadow treasurer Shannon Fentiman labelled the budget update as a “set up”. Picture: Richard Walker

Shadow Treasurer Shannon Fentiman argued Premier David Crisafulli’s budget update was a “set up”.

“He is making this as bad as possible and then lo and behold in five months time there will be an improvement in revenue and a reduction in the debt forecast,” Ms Fentiman said.

“They have juiced this up, the same way they cooked Cross River Rail to play a political game, which would be funny if it wasn’t serious for Queensland’s borrowing cost.

“The question is, has this theatre damaged Queensland’s credit rating?”

Ms Fentiman called for Mr Crisafulli to “stop acting like he is in opposition and start governing”.

Mr Dick, now deputy opposition leader, called on the state government to provide cost-of-living relief to Queenslanders doing it tough.

“That’s why Labor’s calling on the new LNP government to ensure that in the mid-year budget update, that the government focuses on cost-of-living relief for Queenslanders,” he said.

“We know cost-of-living pressures remains the number one issue for Queenslanders.

“It’s why our government put an absolute focus on that.”

Mr Dick, who was not privy to the treasurer’s net debt figures, has previously argued the state’s debt levels were manageable in line with strong economic growth.