‘A challenge’: Billions set aside for services in budget LNP wants to balance

The Crisafulli government will seek to rebalance the budget in June, after Treasurer David Janetzki delivered a mid-year economic update detailing what he said were unfunded Labor promises and projects.

Having delayed the budget update to conduct a more thorough review, Janetzki on Thursday said the LNP would seek to rein in deficits and debt in a “calm and methodical manner”. He declined to foreshadow the measures that would be necessary, nor how far the LNP was prepared to go.

Janetzki said Labor left services underfunded, ranging from police to child safety and housing, despite borrowing more to cover everyday expenses as well as projects that had blown out in cost.

Treasurer David Janetzki gives an update on the state of the budget at 1 William Street.Credit: Markus Ravik

While much has been made of Queensland’s debt levels, largely tied to capital works and major projects, the budget update reveals more about the state’s bottom line. Overall revenue is forecast to remain largely unchanged as expenditure rises significantly – resulting in operating deficits of more than $9 billion in the next two financial years, when Labor was forecasting surpluses.

The budget update notionally sets aside $23.4 billion over four years as an “allowance for under-funded legacy issues and other adjustments,” almost three times as much money as needed to deliver the LNP’s election promises.

Janetzki said that reflected the discovery of unfunded and underfunded services across government.

“Knowing what we know now, it is a serious challenge to return the budget to an operating surplus,” Janetzki told reporters.

But Janetzki appeared to rule out any cuts to services, saying the LNP would deliver more than Labor and “the services than Queensland needs”.

He used similar language in relation to Queensland’s ballooning debt level, saying debt would be lower under the LNP than Labor, while refusing to be drawn on whether more projects would be scrapped.

The budget update puts total borrowing at $98.8 billion by 2027-28 (when Labor forecast it would be $59.8 billion), which a government spokesman said did not include the $36.8 billion cost of the Pioneer-Burdekin Dam that the LNP has already scrapped.

Janetzki would not be drawn on whether the LNP would be able to keep the promises he made when he delivered the party’s election costings, including future debt levels, but said work to frame the government’s first full budget had already begun.

The budget update forecasts economic activity and employment rising higher than Labor had forecast for 2025-26, delivering a significant boost to Treasury’s payroll tax and mental health levy collections.

“Queensland’s economy and labour market continue to face several risks, including the potential for household consumption to be weaker than expected if interest rates remain higher for longer,” the update states.

“Meanwhile, capacity constraints and elevated building costs could continue to hinder activity in the construction industry.”

Inflation and wage forecasts are unchanged on Labor’s last budget.

However, the government will make more than expected out of stamp duty on property sales, with Treasury saying “residential property prices in Brisbane are expected to maintain relatively robust growth in the near term before returning to more modest growth over the forecast horizon”.

Treasury has more modest expectations of mining royalties, and is pessimistic about GST payments, but Janetzki would not be drawn on any new revenue measures.

Former treasurer Cameron Dick later dismissed the budget update as “LNP politics, pure and simple”.

“This is a government so hell-bent on attacking Labor, and denigrating Labor, that they’re prepared to jeopardise the budget to do so,” he said.

“The LNP are cooking the books to create the worst possible set of numbers to soften up Queenslanders for what comes next. And that includes cuts, particularly cuts to infrastructure, and rescoping and descoping infrastructure projects across Queensland.”

Shadow treasurer Shannon Fentiman questioned why Janetzki had not given a breakdown of the additional expenditure on services, suggesting he was “laying the groundwork for cuts”.

She said the budget update also removed $3 billion in unallocated or unrealised savings from previous initiatives, to allow for more dramatic changes in June when the next budget is handed down.

“This is exactly what Campbell Newman did when he won the election,” Fentiman said.

The government is awaiting a review of the venue plan for the 2032 Olympic and Paralympic Games, and has yet to detail its future energy plan, including its promise of smaller pumped hydro projects, despite blackouts during the ongoing Queensland heatwave.

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