Budget 2024: Queensland ready with more giveaways to put ‘downward pressure on CPI’

Queensland’s Labor government is preparing to dole out more cost of living relief in its state budget despite warnings form economists that it could stoke inflationary pressures.

Queensland Premier Steven Miles. Picture: NCA NewsWire / Tertius Pickard

Queensland’s Labor government is preparing to dole out more cost-of-living relief in its budget next month despite warnings from economists that it could stoke ­inflationary pressures.

The $300 energy rebate announced in Tuesday’s federal budget will bolster a $1000 state payment to offset higher power bills – meaning the average Queensland household will not pay an electricity bill until March 2025. Premier Steven Miles has ­already flagged the state budget would put even more funds “ back into the pockets of families”, despite inflation remaining stubbornly high. Neither the federal nor state government rebates are means tested, allowing even the highest income earners to have their power bills wiped.

Mr Miles said cost-of-living ­relief was Labor’s “No.1 priority” and insisted power rebates were the best way to help while putting “downward pressure on CPI”.

“The fact is, because of those rising interest rates, even those on what might be considered higher incomes – for example a nurse and a teacher – under many means testing schemes they would be seen as a higher income household and would miss out on the rebate,” he said.

“I think they deserve to get the rebate because they’re experiencing those big increases in their mortgage costs.”

In a submission to a parliamentary committee examining the $1000 rebate legislation, due to be debated in state parliament next week, economist Gene Tunny said relief should be means tested.

“While many needy households will benefit, the rebate will also go to hundreds of thousands of financially comfortable households that do not need the assistance,” said Mr Tunny, a former commonwealth Treasury economist and director of Adept ­Economics.

“Under the current proposal, the government will unnecessarily spend hundreds of millions of ­dollars.” In his submission, St Vincent de Paul Queensland chief executive Kevin Mercer said he was also concerned that the ­measure was “not sufficiently targeted to those most in need but ­instead represents a subsidy to all Queenslanders, including those with the ability to absorb higher energy cost”.

Queensland Treasurer Cam­eron Dick said energy rebates ­offered last financial year had ­“reduced inflation”.

“We anticipate that will continue,” he said. “The economic evidence is clear; the advice of the-then governor of the Reserve Bank and the federal Treasury, the state Treasury, all of those bodies are clear and, independently of them, again, the Australian Bureau statistics demonstrates conclusively that energy rebates have a downward impact on inflation.”

Queensland’s Liberal National Party opposition will vote for ­energy rebates, with leader David Crisafulli saying he would not “stand in the way” of support.