Queensland Treasurer’s $5bn super grab ‘a budget gimmick’

Queensland Treasurer Jackie Trad’s debt reduction plan has been shredded.

Queensland Deputy Premier and Treasurer Jackie Trad hands down the state's Mid-Year Economic and Fiscal Review 2019-20 in Brisbane on Thursday.

A former federal Treasury economist has labelled Queensland Treasurer Jackie Trad’s debt reduction plan a “gimmick” as latest figures show borrowings now equate to more than $15,000 for each resident of the state.

Ms Trad’s mid-year fiscal update this week confirmed Queensland’s total government debt would soar past $91bn in four years, despite her new $5bn raid on the surplus of public servants’ superannuation.

The Palaszczuk government’s debt sits at $77.85bn and, with the population at 5.1 million, that equates to $15,148 per person.

That figure is set to rise, with the financial update predicting debt is increasing at a faster pace than forecast in the June budget and will hit $91.79bn by 2022-23.

The rise will occur despite Ms Trad’s debt reduction plan: taking $5bn from the surplus of the ­bureaucrats’ defined benefit superannuation fund and creating a new debt offset account to be invested by the Queensland Investment Corporation.

Economist and former federal Treasury official Gene Tunny, ­director of Adept Economics, said Ms Trad’s $5bn “Queensland ­Future Fund” was a “gimmick”.

“It’s a political solution, not an economic solution. Treasury’s just taking money they already had and putting it in a different jar, managed by the same fund manager, and saying one day we’ll be able to pay down debt with it,” Mr Tunny said.

Gene Tunny.

“To pay down more debt you have to generate surpluses and sell or lease assets, so I don’t think this is going to have much of an economic impact.”

Ms Trad’s skinny 2019-20 ­operating budget surplus was shaved from the $189m predicted in the June budget to $151m, hit by a dramatic dive in coal royalties, from a forecast $4.3bn to $3.7bn.

But the Treasurer’s public service razor gang found $700m in cuts this financial year, half a billion more than originally planned, including clawing back unnecessary taxes paid to the federal government and slicing the daily rate paid to consultants.

But Mr Tunny said he was “sceptical” about whether those predicted savings were too good to be true: “They’ve pulled the rabbit out of the hat with those savings but we’ll need to wait to see the final budget figure (next year) to show if they are released.

“To an extent, they look a bit too good to be true. I’m surprised there were those savings lying around they could easily make. I want to see if they are achievable.”