Qld Govt expenditure growth has resumed after extraordinary period of austerity

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.

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6 Responses to Qld Govt expenditure growth has resumed after extraordinary period of austerity

  1. Katrina Drake says:

    I agree with your concerns regards the unnecessary and avoidable expenditures in the Qld budget. But I think that government is right on track with its attack on the ‘state elephant in the room’.

    The fact that half of the Health budget, which is 28% of the total budget, approx $14B is wasted on treating self induced sickness.

    The Qld Clinical Senate is meeting on the July 31 to discuss obesity prevention strategies, and its work maybe more important than any budget.

    Qld Chief Health Officer Jeanette Young, maybe the budget’s best hope. With almost 2/3 of the Qld adult population overweight, obesity and life style diseases such as heart disease, diabetes , and pregnancy complications are becoming normalised.

    Obesity is a burden to the individual, having to haul around 15 extra kilograms all day every day. Obesity is a burden to the productivity of the work force, it is a burden to the family, our health system, and the tax payer.

    15kg is the amount the average Queenslander needs to lose. Drop that weight and our budget will be back in surplus.

    • Gene Tunny says:

      Thanks Katrina. I agree we need to focus on preventive health, but I’m unsure if it will yield big gains. Unfortunately the way our cities have evolved, with fewer places that are pedestrian friendly, means we tend to drive most places rather than walk or ride. Also, our busy lifestyles mean we eat too much fast food. It will be hard to change people’s habits. By the way, where did you get the 50% of the health budget statistic?

  2. Toby says:

    Interesting point Katrina. Unfortunately, this is the realm of personal choice and should not necessarily involve government intervention. In fact, this is exactly this issue – that Government feels the need to answer each publicly debated societal problem with a new policy solution and corresponding expenditure – this has landed us in this mess. We need leaders with the courage to say ‘no’. Particularly, in regard to the economy where they claim much more influence than they actually hold.

    However, playing devils advocate for a moment, how about an additional medicare levy which is rebated to everyone who is certified not to have a lifestyle illness by a doctor once a year or at least is enrolled in a rehabilitation program of some sort? That may re-coup some of the expense of these self-inflicted conditions. Think also of the opportunity for preventative health measures that might be adopted if this also encouraged everyone to visit the doctor at least once a year!

  3. Toby says:

    Sorry to resurrect this thread after so long Gene but I have just read about an idea that might help with the outstanding problem of rising health care costs of an aging population and had to share. How about instead of a rebate we offer an age defined tontine? The payoff may incentivise people to live a healthier lifestyle?

    http://www.washingtonpost.com/news/wonkblog/wp/2015/09/28/this-sleazy-and-totally-illegal-savings-scheme-may-be-the-future-of-retirement/

    Unfortunately, still no solution to that pun of yours above!

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