The debate over the 2015-16 Queensland Budget continues, with the Courier-Mail publishing an opinion piece by State Political Reporter Steven Wardill, Today’s problems in Queensland bigger tomorrow after Budget, say economists, quoting me and fellow economist (and friend and former colleague) Joe Branigan. I have previously expressed my concern about several of the Government’s budget measures, such as the accounting trick of transferring general government debt to government-owned businesses. Also, I’ve criticised unnecessary and avoidable expenditures (e.g. $100 million for the Townsville sports stadium) and the resumption of growth in public service numbers, at a rate of 3,000-4,000 extra public servants each year.
While forecast expenditure growth seems modest compared with the unsustainable growth over much of the 2000s (see chart below), in my view it should be much lower so the Government can generate the large surpluses it needs to substantially pay down debt. The previous Government showed that extreme expenditure restraint is possible, although two years of practically zero expenditure growth probably contributed to that Government’s eventual election loss, so I doubt any Government will be that courageous in the future.