Qld budget 2025: $45bn cost blowouts dig state into looming blackhole

Hidden grenades are continuing to explode in the face of David Janetzki, just days away from the treasurer’s first budget.

Treasurer David Janetzki forecasts state deficits will exceed $30bn over four years. Picture, John Gass

• Editor’s view: Blame game ends on Tuesday

The state government is facing a cascade of cost blowouts worth a staggering $45bn across major infrastructure projects and services ahead of the unveiling of its first budget, including a new $638m health funding hole, it can be revealed.

Treasurer David Janetzki in his January mid-year financial review said $23bn would be needed to address underfunding in health, education and child safety services and other growth funding for government departments.

The government has now revealed its latest budget blackhole – $638m needed to open the new 186-bed Mater Hospital in Springfield under a public-private partnership.

The hospital, announced in May 2022 under then-Premier Annastacia Palaszczuk, was due to open in 2024, but is now likely to commence early March 2026.

In a media statement, Labor stated it would “fully fund the additional operational funding required for the new facility on an ongoing basis from its expected opening in 2024”.

Health Minister Tim Nicholls said the failure to budget for the more than 1000 staff and services required to run the hospital over the next four years was reminiscent of a “Yes Minister” moment.

$638m is needed to open the new 186-bed Mater Hospital in Springfield under a public-private partnership. Picture: Annette Dew

“They (Labor) can’t even remember to fund the operational requirements for a brand-new hospital,” he said.

The latest blowout will join Mr Nicholls’ $12bn shortfall in Queensland Health programs and services which he says were left underfunded.

LNP ministers have declared $45m worth of blowouts in their first seven months of government, which Mr Janetzki is now tasked with balancing his first budget against alongside $23bn in department overruns and $7.1bn in election commitments – without raising taxes or royalties, selling assets or cutting services and infrastructure, as promised.

Economist Saul Eslake questioned the validity of the $23bn department services black hole, particularly in the absence of a pre-election treasury report.

Queensland is one of only two jurisdictions in Australia that does not require treasury to produce an independent fiscal outlook before an election to protect political interference from a new incoming government.

Mr Eslake said Mr Janetzki would need to consider cutting infrastructure spending or selling state assets.

“You could defer or cancel capex, particularly since you only have to project four years forward, and particularly for projects that haven’t started,” he said.

“You could say cut money on services, operating expenses by not hiring more staff or cutting staff, or you could raise additional taxes.”

“Then there’s assets, Palaszczuk did some privatisations, Beattie sold off Sun Retail.”

Mr Janetzki forecasts state deficits will exceed $30bn over four years, with a $9.2bn hole expected in both 2026-27 and 2027-28. Debt is projected to hit $217.8bn, or more than $39,000 per Queenslander, the highest rate in the country.

Originally published as Qld budget 2025: $45bn cost blowouts dig state into looming blackhole