Queensland budget dives into debt to avoid ‘anvil of austerity’
Queensland Treasurer Cameron Dick has warned hiking the state’s debt is the ‘only thing we can do’ to help the economy recover from the COVID-19 pandemic.
Queensland Treasurer Cameron Dick has warned hiking the state’s debt is the “only thing we can do” to help the economy recover from the COVID-19 pandemic but insists the borrowings will be far less than in NSW and Victoria.
Ahead of Tuesday’s delayed state budget, Mr Dick said the government did not want to borrow any more but had to, otherwise he would “drop an anvil of austerity” on Queenslanders struggling financially.
While Mr Dick would not say how much debt would rise, he said borrowings would be “significant” but “reasonable and prudent”. In September, Treasury forecast Queensland’s total debt would rise to $102bn by mid-next year, but that does not include the $4bn over four years Mr Dick has promised to borrow to fund promises made at the recent state election.
On top of the $4bn, Mr Dick will be forced to increase debt to fund deficits for at least the next four years.
“Debt numbers in Queensland will be lower than NSW and Victoria, and that will be a positive thing for our state and reflect our strong economic recovery in Queensland,” he said on Sunday.
“As Queensland Treasurer, I don’t want to borrow any more … but at the moment, borrowing is the only thing we can do to ensure we continue to strengthen the Queensland economy.
“To do otherwise would be to go down the path of austerity, and we’re not going to drop an anvil of austerity on Queenslanders who are hurting as a consequence of COVID currently. Our borrowings will be reasonable and prudent to ensure we can continue to deliver economic recovery and jobs for Queenslanders, and we’ll continue to be very careful and prudent with that going forward.
“We said we’d need to borrow to fund our deficits … we said there would be deficits over the forward estimates, and of course the only way you can fund that is through borrowings.”
In parliament on Thursday, Mr Dick criticised the NSW government’s “eye-watering” total debt forecast of $191bn by June 2024. On the measure of net debt, this month’s Victorian budget was forecast to hit $155bn by 2024.
The most recent Queensland forecast for net debt — delivered in the September update and taking in government-owned corporations in the non-financial public sector — was $64bn by mid-2021.
Mr Dick has ruled out any new or increased taxes for the Palaszczuk government’s four-year term, and on Sunday indicated the government would not introduce an electric vehicle charge, as other states have done.
On budget day, Queensland’s borders will reopen to greater Sydney and Victoria. Mr Dick would not say how much the state’s border closures had cost the economy, but he insisted if there had been a second wave in Queensland, it would have cost $3.1bn a month.
A recent report from Deloitte Access Economics warned Queensland’s increasing debt needed to be “used for good”, and suggested the state should undertake “meaningful tax reform” and shift from stamp duty to an annual property tax or land tax.
“As recovery decisions are made globally, the gap between the state’s debt and revenues will increase over time if Queensland doesn’t deliver a bold and competitive economic agenda on the right scale,” the Deloitte report said.
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