I made two trips to ABC’s South Brisbane studios yesterday. On the Breakfast program, hosts Bec Levingston and Craig Zonca and I chatted about Queensland’s growing state debt, the distinction between good and bad debt, and the state’s credit rating. I spoke after the Deputy Premier-Treasurer had chatted with Bec and Craig, and you can hear me from around 2 hours, 34 minutes into the recording:

http://www.abc.net.au/radio/brisbane/programs/breakfast/breakfast/9839236

On Steve Austin’s Drive show in the afternoon, Steve and I chatted about my impressions of the budget, released just three hours earlier. I told him I thought the projected operating surpluses were too thin and actually negligible when compared with gross state product (see chart above based on data published in the budget as well as ABS data). I also noted that, even according to the metrics the government prefers, the budget projects a deterioration in Queensland’s fiscal position. For example, on p. 48 of Budget Paper 2 we discover:

• the general government debt to revenue ratio is projected to increase from 54 percent in 2017-18 to 68 percent in 2021-22, meaning the government is not expected to comply with the fiscal principle to “Target ongoing reductions in Queensland’s relative debt burden…”; and
• the proportion of general government net investments in non-financial assets financed by net operating cash flows will fall below 50 percent to 40 percent in 2019-20 and 44 percent in 2020-21, meaning the government is not expected to comply with the fiscal principle that it will “ensure any new capital investment in the General Government Sector is funded primarily through recurrent revenues rather than borrowing.”

You can hear Steve and me chatting from around 1 hour, 1 minute and 50 seconds into the recording:

http://www.abc.net.au/radio/brisbane/programs/drive/drive/9839250