Queensland election 2017: Luck plays part in $2.8b surplus

A RECORD operating surplus has got the Government’s election campaign off to a good start. But luck played a big part.

CONFIRMATION that Queensland recorded its best operating surplus in a decade during 2016-17 is a genuine fillip for Labor in the first week of the campaign.

Despite all the debate about public service spending, the State Government has ensured expenses growth has not outpaced revenue growth for the past two financial years.

This is no mean feat for a state reliant on revenue streams that are highly susceptible to the whims of international markets.

Both the Newman and Bligh governments endured years when expenses shot past revenue.

However, luck certainly played a part in the $2.8 billion final operating surplus for 2016-17 that Treasurer Curtis Pitt beamed about yesterday.

Revenue jumped $5.5 billion as coal prices spiked and the Commonwealth finally stumped up its share of disaster funding.

Overall, revenue jumped 10.7 per cent, shooting past the expected 6.9 per cent figure.

Steven Wardill’s election playlist:

This ensured a 7.2 per cent increase in spending, above the decade average of 6 per cent, looked reasonable.

However, despite the crowing about “sound financial management” and reduced debt, the state’s borrowings on the Government side of the ledger will return to what they were in three years.

Overall debt, which includes the books of government-owned businesses, will hit $81 billion at the same time.

Pitt yesterday insisted this was a “magical or mythical” figure because “that is not the debt the men, women and children of Queensland are paying”.

However, interest payments on debt owed by the businesses are really a tax on their dividends.

Also, because Queensland’s revenue is sporadic while spending growth remains consistently high, that is money which must be raised elsewhere, leading to additional taxes on everyone else.

It is not a magic pudding, after all.

Originally published as Queensland election 2017: Luck plays part in $2.8b surplus