Courier-Mail’s public service wages-budget threat story based on Joe Branigan’s QEW guest post

Well done to Joe Branigan on having his QEW guest post from last week, “Moody Blues”, quoted by the Courier-Mail’s Steven Wardill today (Qld Budget 2017: Public service wages threaten bottom line):

THE cash-strapped State Government will have to impose a public service hiring freeze for two years to avoid blowing its expense forecasts and risking a credit rating downgrade.

Analysis of Treasurer Curtis Pitt’s Budget projections has revealed the $1.2 billion extra forecast for employee expenses until 2018-19 would be soaked up by pay rises…

…Former federal treasury official Joe Branigan said the Government’s claim that it would keep overall expenses growth at 2.1 per cent on average for the rest of this decade was unfeasible.

“Remember that this 2.1 per cent needs to not only account for wages growth, but also the growth in the number of public servants,” he said.

“In my view, this is an impossible expenditure growth trajectory.”

That quote from Joe is straight from his guest post on QEW. The current employee expenses growth projections certainly do look underdone compared with the post-Newman catch up growth in 2015-16 and with growth rates recorded during the Bligh Government (see chart below). I wouldn’t be surprised if these projections are revised upwards in the upcoming State Budget, however. Even though Cyclone Debbie will have an adverse impact on the Budget, higher coal prices will have helped the bottom line, and word on the street is that Queensland Treasury’s economic forecasts for the next few years are strong, providing the Government a much needed boost in revenue.

employee_expenses_growth_17

Of course, it’s all speculation at the moment, and we really need to wait for Treasurer Pitt to reveal the numbers on 13 June. But I would certainly expect a pre-election State Budget full of sweeteners, particularly for the regions. The Government needs to shore up its support in regional Queensland, where several seats might end up being won by Pauline Hanson’s One Nation. If that occurs, I expect we would see a change of government.

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