At the Parliamentary Inquiry into the Queensland Government’s economic response to COVID-19 on Monday last week, I called for the Government to publish its internal-use estimates of the state budget position and debt, so we don’t have to wait until the planned budget update in September (see my remarks). Thankfully, the Queensland Government released its estimates yesterday, in its Update on Queensland’s fiscal position media release, on the same day as the Australian Government’s more comprehensive budget update. I spoke with Bec Levingston on 612 ABC Brisbane radio this morning about the update. Bec then spoke with the state Treasurer Cameron Dick. Here is a link to the audio, which will only be available for a week or so (NB the segment starts at 6:40):
I reiterated several of the points I made to the Inquiry Committee, including the need to properly target assistance and ensure value for money, and for the state government to provide a long-term plan for eventually stabilising the debt-to-revenue and debt-to-GSP ratios.
The fiscal position update was disheartening, with estimated operating deficits of
$5.9 billion in 2019-20 and $8.5 billion in 2020-21. Note these are the operating deficit estimates, and do not include net capital expenditures. The estimated operating deficits imply overall fiscal deficits of $10 billion or more in 2019-20 and at least $13-14 billion in 2020-21. General government debt is expected to increase 36% in 2020-21 to nearly
$60 billion at the end of financial year. Total state debt, including the government-owned corporations as well, will be around $100 billion by mid-2021.
I’ll have more to say in future posts. Early next week I’m planning to interview Joe Branigan for his thoughts, so keep an eye out for that. Have a great weekend.
1 William St, the Tower of Power, the home of the Queensland Treasury and other agencies.