Queensland public sector wages to blow out by $925m, Jacki Trad says

A resources royalties windfall is bankrolling Queensland’s projected increase in public sector wages, Treasurer Jackie Trad reveals.

Queensland Treasurer Jackie Trad says the state’s AAA credit rating concerns are not worth imposing “austerity’’ on the public.

Queensland’s projected public sector wages will blow out by $925 million since the June budget, Treasurer Jackie Trad has revealed, bankrolled by a resource royalties windfall.

Resource royalties are projected to soar $678m to $5.1 billion this year alone. However, the coal boom will not affect Queensland’s debt level, which remains on track to exceed $83.5 billion in 2021-22, according to the state’s mid-year budget update.

Since the June budget, the four-year general government wage projection has blown out by $925m, not including the cost of employees’ super entitlements. Ms Trad insisted the government would keep its election commitments to hire more public servants.

Although the Palaszczuk government had previously hoped to regain Queensland’s AAA credit rating this year, Ms Trad downplayed the objective. She said the difference in interest between AA-plus and AAA was barely 0.07 per cent, and was not worth imposing “austerity” on the public.

“Over the past four budgets, we have been investing in Queensland and in Queenslanders to ensure everyone shares in our future prosperity,” Ms Trad said.

Ms Trad blamed the federal Morrison government for weak business confidence, and for delaying infrastructure grants to beyond the forward estimates period.

“We know Queenslanders,’’ Ms Trad said. “Queenslanders need this infrastructure now, so we are funding it now.”

Ms Trad also took aim at the Morrison government for ruling out changes to the GST distribution formula that would lump all minerals together, as floated by the Commonwealth Grants Commission.

This would advantage Queensland which taxes its coal at a higher rate than, for instance, West Australian iron ore.

Queensland’s net operating surplus in 2018-19 is forecast at $524m, up by $376m on the June budget.

Chamber of Commerce and Industry Queensland chief economist Marcus Smith said the resources windfall had partly disguised the need for tighter controls on spending.

“Of course, it is not a difficult feat for any government to achieve jobs growth by simply increasing government spending; the genuine challenge for Queensland lies in fostering jobs within the real sector,” Dr Smith said.