Qld budget’s power play: ’Free’ electricity, huge infrastructure spend

A pledge that will see electricity nearly “free” for some and all households in line for a $550 reprieve is unapologetically funded in part by the whopping $15.3bn coal royalties windfall.

• Editor’s view: Poll shock delivered this budget

Electricity will be nearly “free” for Queensland’s most vulnerable and all households are in line for a $550 power bill reprieve in a Palaszczuk government state budget cost of living cash splash unapologetically funded by slugging mining companies.

As families tighten their purse strings the government will move to spend $89bn on its infrastructure “Big Build” out to mid-2027, vowing to back its signature energy, health and Olympic projects despite rising construction costs.

The whopping $15.3bn coal royalties windfall — three times what the government had expected — has also delivered the state government a one-year only “record-breaking” surplus which immediately dips into the red in 2023/24.

And while net debt will be $5.8bn this financial year rather than an expected $19.7bn the government’s need, under Premier Annastacia Palaszczuk, to borrow for its Big Build means the net debt over time will be larger than initially expected.

Treasurer Cameron Dick, emboldened by the heft of the coal royalties riches, confirmed the state government would not budge on mining tax changes it made last year and vowed to “keep fighting” the coal lobby.

The centrepiece of the 2023/24 Palaszczuk government budget is immediate and temporary cost of living relief delivered through a $1.5bn electricity rebate package which builds on power bill relief announced by the federal government.

Small businesses will receive no added government help, with a $650 energy rebate announced in the federal budget unchanged.

Queensland’s 2.2m households will receive at least $550 off their power bills in the 2023/24 financial year.

Eligible vulnerable Queenslanders including pensioners — already in line for a $500 rebate — will receive a double-punch top up worth a combined $522 to bring their total bill help to $1072.

Mr Dick said this meant many “low-income Queensland households, such as pensioners, may pay nothing for electricity next financial year”.

It’s understood about 64,000 customers of major energy retailer Ergon won’t pay a power bill due to the size of the relief for vulnerable Queenslanders.

The average household power bill in southeast Queensland is expected to be $1969 in the upcoming financial year, while those in the regions will be slugged $1926.

The power rebate builds on other cost of living relief measures in the budget including a $645m package across four years to make kindergarten free for all Queensland children from January 1.

Mr Dick unapologetically said coal royalties, including changes made to the regime last year which added an extra tier to take advantage of sky high prices, had made a “very significant contribution” to the budget.

“I don’t step back from that fight at all,” he said.

“I’ll fight them (the Queensland Resources Council) every day because Queenslanders see very clear in this budget what we’re delivering back them.”

Coal royalties raked in a phenomenal $15.3bn for the state in the 2022/23 financial year, $10.5bn of it from the new tier — far higher than the $5.4bn in total coal royalties expected, with $765m meant to come from the change.

Overall the coal royalties changes will rake in $7.2bn for the state over four years, up from the $1.2bn Treasury had initially forecast in last year’s budget.

Rivers of coal gold have led to the Palaszczuk government delivering what it touts as the biggest budget surplus delivered by any state government anywhere in the nation — at $12.3bn — in the 2022/23 financial year.

But the government will go directly back into a $2.2bn deficit in 2023/24, projecting thin surpluses between $105m and $377m in the years following.

Net debt was set to be $19.7bn this financial year, but has been brought down to $5.8bn.

The figure will increase substantially in future years — though lower than initially expected — climbing to $47bn in 2026/27.

Victoria’s net debt by 2025/26, in comparison, is expected to hit $171.4bn.

The Queensland government will spend $89bn on its Big Build infrastructure program, with the state budget adding in buffers to deal with rising costs.

Mr Dick said continuing with the projects despite significant rising construction costs was a “deliberate decision” of the government.

“Government either backs these projects and accepts their higher costs, or government has to walk away,” he said.

After the budget’s announcement on Tuesday, Mr Dick said the government “recognises the considerable cost of living challenges being faced by Queenslanders and is tackling these challenges”.

“Queensland’s economic strength and success has allowed the Government the opportunity to invest wisely in easing cost of living pressures for all Queenslanders,” he said.

“The 2023-24 Queensland Budget is delivering record concessions funding for Queensland families and businesses in 2023-24, an estimated increase of more than 21 per cent.

“This unparalleled cost of living relief demonstrates this Government understands the cost of living pressures faced by all Queenslanders.”