Extra $4bn debt to pay for Labor promises: Queensland Treasurer Cameron Dick

Queensland Labor will increase the state’s ballooning debt by more than $4bn to pay for its election promises.

Queensland Treasurer Cameron Dick confirmed that because of the COVID-19 pandemic, Labor had no chance of meeting three of its six fiscal responsibilities. Picture David Clark

Queensland Labor will increase the state’s ballooning debt by more than $4bn to pay for its election promises, as it emerged two of its centrepiece policies are largely unfunded or dependent on $1bn in budget cuts.

Ahead of Saturday’s state election, Treasurer Cameron Dick released Labor’s costings, revealing that a re-elected Palaszczuk government would lock in at least four years of deficits, with debt forecast to rise to at least $102bn by mid-next year.

Mr Dick confirmed that because of the COVID-19 pandemic, Labor had no chance of meeting three of its six fiscal responsibilities — including keeping public service growth to below the rate of population growth, which has slumped to World War I levels.

He attacked the Liberal National Party opposition for failing to increase borrowings, for promising to deliver a surplus within four years, and for not yet releasing its costings or revealing a funding source for its election commitments.

Mr Dick said the LNP was planning to cut jobs and services to pay for its promises and still record a budget surplus. “To get back to a surplus in four years, with key revenue lines down $6.7bn, the LNP must cut jobs in Queensland, and they must do that, I presume, through redundancies or natural attrition.

“They’ll have to cut health jobs and services, which is a significant proportion of the budget that is made up of health investment.”

The fine-print of Labor’s costings document reveals at least two of its big-spending election commitments come with strings attached — including health cuts.

Labor’s flagship health announcement — an extra 5800 nurses, 1500 doctors and 1700 ¬allied health workers by September 2024 — will be possible only if Queensland Health finds more than $1bn in savings over four years.

Mr Dick initially said there were “no restrictions” on Queensland Health on how the department delivered its budgeted “productivity dividend”, which equates to 2 per cent of the annual health budget, or $270m a year.

Denying the savings were “cuts”, Mr Dick said the department was not allowed to decrease staffing numbers to meet the efficiency dividend but he did not say how it would be met.

As well, Annastacia Palaszczuk’s centrepiece regional jobs booster — $400m for the Works for Queensland jobs policy for regional councils and $200m for southeast Queensland councils — has only $250m set aside for the next four years.

Despite a government spokesman saying on the day of her announcement that the money was to come from the $4bn debt-funded election war chest, the costings document shows only a fraction is from borrowings in the next term of government.

The remaining $350m is “committed beyond the forward estimates”, and a spokeswoman for Mr Dick said the government could not say whether that money would come from extra debt or elsewhere.

The Treasurer said on Monday Labor’s election commitments would not be funded by any extra borrowings beyond the $4bn he announced last month.

Opposition Treasury spokesman Tim Mander, who has not said when the LNP will detail its costings, said the $1bn in Queensland Health cuts was “reckless in the middle of a pandemic”.

“Labor would be the only government in the world choosing to cut the health budget during coronavirus,” he said. “With no fiscal principles and no budget, Labor can’t be trusted to manage the economy during a recession.

“Massive expenditure locked in outside the forward estimates will increase debt because Labor has no plan to return to surplus.”

Of the state’s six fiscal principles, Mr Dick said Labor was “committed” to them but the government could not meet three because of COVID-19. This includes the rule to keep the rate of public service growth below the rate of population growth.

“Population growth hasn’t been this low since the end of the first World War,” Mr Dick said.

“We’re not going to … gut the public service to match that fiscal principle.”