No Budget spendathon in store after shock scale of govt’s debt

Queenslanders are assured of two things at Cameron Dick’s next – and possibly last – state Budget: a “record” cost-of-living relief package and eye-watering debt figures unseen before in the state, as the realities of what lies ahead become clearer.

Queensland Deputy Premier and Treasurer Cameron Dick during parliament sitting in Brisbane. Picture: NCA NewsWire/Tertius Pickard

Queensland’s surprise debt surge has set the stage for Treasurer Cameron Dick’s upcoming – and potentially final – state budget.

Queenslanders are assured of two things; a “record” cost-of-living relief package and eye-watering debt figures unseen before in the state.

Treasurer Cameron Dick’s decision to release preliminary Treasury forecasts two months before the state budget is a political calculation designed to ensure headlines of the relief package are not overshadowed by the sea of red ink when the time comes in June.

Mr Dick is also tempering expectations of his colleagues who are hoping for sweet big-ticket announcements to curry favour with frustrated electorates in the lead up to a do or die state election.

This won’t, and can’t, be a spendathon campaign on either side.

Helpfully for the state government its mega $96.2bn infrastructure pipeline, which only grows amid ongoing cost increases, is already baked into the budget.

The preliminary forecasts show by 2028 net debt will soar to $73bn, with gross general government debt doubling from what it is now to $128m.

When you add in the debt held by government-owned corporations, Queensland’s total debt jumps to $188bn by 2028.

Mr Dick has pointed to a decrease in Queensland’s share of GST and a 25 per cent drop in the price of metallurgical coal in the past year, along with economic headwinds, for the storm clouds shrouding the state’s finances.

But it is also true that metallurgical coal prices were always due to drop after surging to record highs amid short-term supply-side issues. It is no surprise the revenue take from coal royalties will fall.

Queensland and New South Wales are on a unity ticket in fighting against the federal government’s GST carve up, which will see an already well-off Western Australia reap $6.2bn in the next financial year.

But the $469m drop in Queensland’s GST take in 2024/25 compared to this financial year was predominantly drive by the state’s coal royalties bonanza.

The same coal royalties bonanza that allowed Mr Dick to sport a Cheshire-like grin at the recent budget as he announced the largest ever surplus of any state or territory.

The feel-good surplus always had underneath it a growing debt burden. But these figures are far higher than expected according to economists, including Adept Economics Gene Tunny.

Mr Dick has laid out the state’s debt burden at the feet of Queenslanders. Now he needs to convince them why the Miles government should still be in charge of the books after October.