Public servant costs and lagging coal royalties have been blamed for a budget blowout in Australia’s Olympic host state.
As the Sunshine State inches closer to hosting the games in 2032, Queensland’s half-time budget report card shows a deficit of $8.97 billion this financial year.
That’s a deterioration of $387 million since the June budget.
State Treasurer David Janetzki, who handed down the mid-year budget results on Monday, described the downgrade as “modest increase” from the previous $8.58 billion deficit.
The budget downgrade has been pinned to $345 million in extra concessions towards public sector workers beyond the state wage offer and enterprise bargaining across health and law enforcement.
Coal royalties have also dropped a total of $7.984 billion in 2024/25, $4.787 billion (37.5 per cent) lower than in 2023/24 and $421.4 million (5.0 per cent) lower than forecast in the 2024/25 budget.
A drop in exports and a decline in hard coking coal prices also contributed to the shortfall.
“There’s a lot of different factors into the coal royalty numbers – We want to see more coal being exported. There’s strength in the industry … and we want to see that investment and see those volume volumetric numbers improve,” Mr Janetzki said.
The treasurer insisted Queensland would not cop a credit downgrade, and blamed the previous Labor government for the state of the books.
“We promised a calm and methodical approach to begin the challenging task of budget repair, while bringing forward investments to address the health, housing, crime and cost of living crises facing Queenslanders,” Mr Janetzki said.
“Labor’s decade of reckless fiscal mismanagement left a credit rating downgrade highly likely, even inevitable, but the MYFER shows we have been disciplined as we take the next step on the long journey to fiscal repair.”
Mr Janetzki said returning the budget to “a sustainable footing” would take two terms of government, as it wanted to keep investing in services and infrastructure.
The Labor opposition chose not to comment, citing the Bondi shooting.
Strength in the property and labour markets, along with increases in national GST collections have driven a net $1.053 billion (0.5 per cent) increase in key state revenues across the forward estimates, offsetting near-term reductions in royalty projections largely due to the exchange rate, the government said.
“The MYFER demonstrates that the Crisafulli Government is delivering the plan we outlined in the Budget and restoring respect for taxpayers’ money,” Finance Minister Ros Bates said.
Queensland’s economy grew by 2.1 per cent in 2023/24, driven by a substantial rebound in net exports and continued growth in the domestic economy.
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