Cameron Dick’s bald-faced assertion that debt is “not a dirty word” won’t come as any surprise to taxpayers who long ago lost track of the tab run up by the federal government, courtesy of Covid.
But the Queensland Treasurer could at least be upfront about a borrowing binge that seems to assume there will never be a rainy day in the Sunshine State.
The budget Dick delivered on Tuesday shows gross debt across the general government sector and government-owned corporations jumping from an estimated $95.8bn this financial year to $106.3bn in 2021-22 and $127.3bn by 2024-25.
You have to hunt through the nether reaches of the budget papers to unearth these figures: like his counterparts in Canberra and interstate, Dick prefers to dwell on the much lower number of net debt, which offsets liabilities against investment and revenues.
I would love to do that with my mortgage; sadly the bank has other ideas.
Dick’s argument that net state debt of $25bn is both lower and more affordable compared with Victoria and NSW skates over a crucial distinction: Queensland’s books were awash in red ink long before Covid struck.
For now, nation-leading economic growth and low interest rates will cover Queensland’s exposed position.
General government sector borrowing expenses fell from a peak of $2.3bn in 2014-15 to $1.5bn for 2020-21, amounting to 2.6 per cent of revenues.
The problem is that debt is a long-term problem for the budget.
And, just like the virus, it is proving stubbornly resistant to short-term fixes.
Dick has baked into the forward estimates billions of dollars in popular spending on new hospitals, schools, social housing and roads without lifting state taxes or charges.
He uses creative accounting to pump a nominal $6bn into a debt retirement fund by turning the state Titles Registry into an offset item on the bottom line without generating a dollar of additional revenue.
This is a sop to the credit rating agencies, not credible financial management.
The Treasurer trumpets a return to surplus in 2024-25, but the wafer thin margin of $153m could be blown in even the welcome event that the state secures the hosting rights to the 2032 summer Olympic Games and is landed with half the cost under a deal with the federal government.
What would happen were there were to be another coronavirus outbreak in Queensland?
“Heaven forbid that there is,” Dick said.
The one certainty is that neither the Treasurer nor Premier Annastacia Palaszczuk will be around when the reckoning on debt comes, as it surely must.
‘Disconcerting’: Australia confronts China over live weapons exercise
The Albanese government has lodged a diplomatic protest with Beijing over a live weapons drill between Australia and New Zealand, as the Defence Minister reveals China is yet to give a ‘satisfactory’ explanation.
‘Albanese’s jelly-back spinelessness’: China’s loud and clear message
Xi wants submission from Australia, not stability. Why make it easy for the Chinese navy? Let’s at least show them that our navy can match it with them in skilful manoeuvres. Let’s raise the cost to Beijing, not give it a free ride to demean us.