Queensland Budget 2018: Jackie Trad’s approach very different to Curtis Pitt

JACKIE Trad’s first outing as Treasurer has revealed she is taking a very different path to her predecessor Curtis Pitt. Gone is the era of raiding reserves and other trickery to dress up our debt and in its place a big program of borrowing and spending.

Treasurer Jackie Trad, Budget lock up, Parliament House Annex, Brisbane. Photographer: Liam Kidston

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DIFFERENT treasurer. Different approach.

Curtis Pitt’s forced walk from the big office in 1 William Street to the small office in Parliament House has heralded a new approach to the State Budget.

Gone is the era of raiding reserves and other trickery to dress up Queensland’s debt.

This strategy may have reduced Government-sector debt by $12 billion over three budgets.

However, it just replaced one set of costs with others, such as long service leave now being paid for on an ongoing basis and a reduction in what dividends the State could expect because Government-owned corporations assumed some of that debt.

Treasurer Jackie Trad has ended the “robbing Peter to pay Paul” approach.

Treasurer Jackie Trad with former treasurer and current Speaker, Curtis Pitt. Picture: AAP/Dan Peled

Instead, she’s borrowing more and claiming to be building more and that’s a deliberate choice to cater for Queensland’s growing population.

“We either allow congestion to build or we build the infrastructure we need,” Trad says in her Budget speech.

However, this strategy may simply be borne out of the reality that there’s no more hollow logs for Treasury to raid.

And despite all the rhetoric about building, what will occur isn’t any more than what was already in the pipeline.

For example, government-sector capital works for 18-19 are $5.9 billion.

That compares to the $6.4 billion forecast for 18-19 in last year’s budget.

Even then that assumes the Government actually builds what it has promised.

The cover of Jackie Trad’s blueprint for Queensland’s 2018/19 Budget.

Given another $500 million capital underspend occurred in 17-18, taking the underspend over the last four years to $4 billion, there’s credible doubt.

This capital cut is actually a result of the government earning less than what it had hoped, limiting its ability to build without borrowing more.

Despite five new taxes, revenue will be $1.6 billion less in 18-19 than what had been forecast.

And while the Government is still predicting a skinny operating surplus of less than $150 million, that’s founded a forecast that expenses will grow by just 1.5 per cent.

That’s less than a quarter of the spending growth that has occurred over the last two budgets as employee expense growth routinely leapfrogged forecasts.

The bottom line here is the Palaszczuk Government still cannot put a gap between what it earns and what it spends while one dollar in ten of its own-source revenue continues to be sucked up by interest payments on debt.

It seems the more things change, the more they stay the same.