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Category: Budget / Elections / State Parliament / Coal / Regional Development

Revenue windfall well timed for Queensland Labor as election year looms

Tuesday, 13 Dec 2016 15:00:36 | Chris O'Brien

Treasurer Curtis Pitt dismissed the electoral significance of the budget windfall. (AAP: Dan Peled)

The Queensland Government has suddenly found itself with money to spend as a tough election approaches, with a budget windfall of more than $1 billion.

But Treasurer Curtis Pitt has so far resisted the urge to spend big, confining new outlays to a relatively modest $360 million for much-needed regional jobs.

The Mid-Year Fiscal and Economic Review (MYFER) predicts a surplus this financial year of just over $2 billion — more than twice the forecast in the June budget.

That follows a better than expected final result for 2015-16 and leaves the minority Palaszczuk Government in a better position to frame an election budget next year, just as One Nation looms as a political threat.

But Mr Pitt dismissed the electoral significance of the healthier bottom line.

"You don't make government decisions based purely on electoral outcomes," he said.

Mr Pitt said Labor wanted to stay in government, "but the test is whether we're able to actually continue to see unemployment reduce".

New spending outlined in the MYFER includes an extra $160 million for employment programs and $200 million to help councils build projects that create jobs.

But employment growth has been downgraded from 1.75 per cent to 0.75 per cent this year and there is no change to the predicted unemployment rate of 6.25 per cent.

On the other hand, economic growth was predicted to be at a nation-leading 4 per cent.

Budget figures

BudgetUpdate
Surplus15-16: $152 million
16-17: $867 million
17-18: $1.2 billion
$970 million
$2 billion
$1.1 billion
Revenue
16-17: $53.4 billion
17-18: $55.3 billion
$54.9 billion
$55.6 billion
Coal royalties
16-17: $1.531 billion
17-18: $1.619 billion
18-19: $1.842 billion
19-20: $2.062 billion
$3 billion
$2 billion
$2.1 billion
$2.1 billion
Tax revenue
16-17: $13.2 billion
17-18: $13.8 billion
$13 billion
$13.5 billion
Federal grants
16-17: $27.1 billion
17-18: $28.1 billion
$28.2 billion
$28.1 billion
Government debt
16-17: $37.8 billion
17-18: $38 billion
$36 billion
$37.4 billion

While revenue is expected to increase, spending is also forecast to grow by 5.8 per cent, mainly due to public service expenses.

Government debt fell by $1.7 billion in the updated figures, and total state debt was now expected to reach $77.5 billion in 2019-20, lower than the $80 billion figure forecast previously by various governments.

All down to rise in federal grants and coal royalties

The best operating surplus in a decade is thanks largely to higher federal grants revenue and a spike in coal royalties.

Mr Pitt indicated he would not get carried away with the almost $3 billion of anticipated income from the resources sector in 2016-17.

"The pick up in commodity prices is welcome of course (but) we are not treating this as the new normal," he said.

Queensland Resources Council chief executive Ian Macfarlane said the budget would be in even better shape if not for anti-coal activists.

"The amount announced today would have been even higher were it not for the activism, delay and red tape that's been imposed on the industry over the last few years," Mr Macfarlane said.

Opposition Leader Tim Nicholls highlighted the bleak outlook for employment growth and said the Government had "squibbed it" by not committing more money to infrastructure.

Queensland's forecast growth strongest of all states. Infographic: Queensland's forecast growth strongest of all states. (Supplied: Queensland Government)

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