State’s long road back to black

Preparing their first budget, Queensland Treasurer David Janetzki and Premier David Crisafulli were tightly wedged on all sides. Behind them was Labor’s legacy of debt, projected to reach $217.8bn by 2027-28, almost $40,000 per capita – the highest in the nation, according to the state’s mid-year fiscal and economic review in January. In front were declining coal royalties, the 2032 Olympics, needing billions of dollars in infrastructure spending and missing out badly in the latest GST carve-up. And looming overhead was former Liberal National Party premier Campbell Newman’s legacy. His public service cuts and public assets lease plan, the right economic medicine for the state, resulted in him losing office, despite a vast majority, in a landslide in 2015 after a single term.

It made a big impression. Mr Janetzki could not even bring himself to say the word cuts in his pre-budget media briefing: “I’m not even going to say the word but what I will say is their (the Labor opposition’s) scare campaign ends today”. He promised a “calm and methodical” budget and delivered one with few ripples, let alone signs of austerity.

The public sector wages bill for 2025-26 will rise by 4.9 per cent because of pay rises and extra police, teachers and nurses. Queensland is growing and needs more frontline staff and services, which should make allocations to deal with youth crime, cut surgery waiting lists and ambulance ramping, and lift students’ NAPLAN results worthwhile. The budget contained nothing as reckless as Labor’s $1000 non-means-tested power bill rebates but it gave out more goodies than fiscal circumstances and an early stage of the electoral cycle demand.

It locked in Labor’s 50c public transport fares, adopted by the LNP at the election, and will hand out a $100 “Back to School Boost” from January 1 for every primary school student, non-means-tested, regardless of the fact most parents can pay for schoolbooks, uniforms and excursions. Even by Labor standards, the LNP’s “Boost to Buy” scheme will be one of the nation’s biggest “big government” first-home buyers’ equity schemes. From July 1, taxpayers will invest up to 30 per cent equity for new builds and 25 per cent of existing homes, up to a value of $1m. Its impact on an already-booming property market remains to be seen.

The LNP has done well opening nine new areas across the Cooper, Bowen, Eromanga, and Surat basins to tender for gas projects. But, regrettably, fiscal largesse left no room for payroll tax cuts to boost productivity. In the medium-term view, the government plans to reduce public sector debt per capita to $34,000 by 2027-28. After a big -spending start and much to repair, the jury is out on the LNP’s financial management.