Queensland Treasurer Cameron Dick is trying to have it both ways regarding Queensland’s budget outlook. He is arguing the Opposition’s target of a budget surplus by 2023-24 is unattainable, but he has previously argued the budget outlook is so uncertain it was impossible to publish a full set of budget forward estimates prior to the election. The debate about the Opposition’s surplus target re-started yesterday when the Prime Minister appeared to support the state Opposition’s objective, as reported by the Brisbane Times: PM’s cameo has LNP banging surplus drum amid spat with Deputy Premier.
For clarity, based on the comments of the Opposition and the Treasurer the debate around the budget surplus relates to the operating balance, the difference between general government receipts and recurrent expenses. The fiscal balance, which includes net capital expenditures, is usually in deficit, because the government “borrows to build”. The fiscal balance won’t be returning to surplus any time soon so debt will continue to rise over the forward estimates and no doubt beyond them.
But it is conceivable the operating balance could return to surplus by 2023-24 and, indeed, in our report for the Australian Institute for Progress, Joe Branigan and I projected a very slim operating surplus, of $250-300 million, in 2023-24, with operating deficits in the years prior, in our main scenario. The Government would still be running a fiscal deficit that year of nearly $3 billion, so it would still be incurring additional debt, but an operating surplus in 2023-24 is not impossible, unless the economic outlook and the budget outlook are so much worse than what the Government has suggested so far. Of course, that’s entirely plausible given all the bad news we’ve heard recently about COVID around the world and rumoured Chinese restrictions on Aussie coal.
Based on Treasurer Dick’s recent comments, and recent bad news from around the world, I’m starting to think the worst-case scenario that Joe and I presented in our report is looking more like what should be the central scenario, with operating deficits for the foreseeable future, and with general government debt climbing to $77 billion, and total state government debt climbing to $118 billion, by 2023-24. So we could end up with general government debt around 140% higher than it was in 2018-19. Admittedly, it’s all very uncertain which is why Joe and I presented ranges for our estimates in our report. I’d be really interested to see what ranges for the budget aggregates Treasury is estimating.
So we can have an informed public debate in the lead up to this very important election, Queensland’s first for a four-year term, Queensland Treasury should immediately release its budget forward estimates out to 2023-24, which it is no doubt using internally and has obviously provided to the Treasurer in the past. The Treasurer’s confident claim the Opposition cannot achieve its surplus target suggests to me those forward estimates exist, and it’s time for the Treasury to produce them.
The battle is underway for control of the House for the next four years.