COVID-19 pushes Qld debt past $91.8 billion as revenues collapse

Treasurer Jackie Trad expects the state’s massive debt to eclipse the forecast $92 billion – she’s just not sure how much bigger it will get.

QUEENSLAND will need to borrow big as it responds to COVID-19, but the Treasurer still doesn’t know how much more the state’s debt bomb will soar past its previous estimate of $91.8 billion.

Jackie Trad ruled out increased taxes and royalties and promised not to go after public servant jobs as she nominated slashing government travel and a $500 million public servant pay rise freeze as ways to claw back billions in savings.

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Asked whether she had a “ballpark figure” around what extra debt the government would need to take on to make up the $4 billion in revenue writedowns and billions in extra spending, she said: “I don’t at this stage.”

Treasurer Jackie Trad

It follows Moody’s rating agency this week finding Queensland’s outlook was “stable” but its AA1 credit rating risked downgrading if a higher debt burden saw significant deficits and continued revenue weakness without an appropriate policy response.

It identified the growing debt burden to fund infrastructure spending and increasing revenue and expenditure challenges exacerbated by current conditions were “credit challenges”.

Ms Trad said the Commonwealth had taken on $320 billion in debt to respond to the pandemic and states would have to borrow too.

“It means government tightening our belts, it means doing what the Commonwealth has done and look at additional borrowings but we know it’s going to be a combination of a range of things,” she said.

“But at the end of the day, what Queenslanders want is they want us focused on them, their jobs, their businesses that they have invested their life savings in that are now closed.

“That’s where our focus is and we need to make sure that we are doing what that RBA said and that is using our balance sheet to protect the economy.”

Treasury has estimated a $4 billion revenue writedown as GST revenues collapse because people stop spending on “non-essential” goods that attract the tax, transfer duties plummet as people stop buying houses and other revenue bases are whacked.

The Treasurer said she expected “big conversations” to be had in coming months around revenue, taxation, industry policy and around how economies can be better protected from global shocks.