I was pleased to speak with 4BC Drive host Scott Emerson yesterday about the 2020-21 Queensland Budget. Among other issues, Scott and I chatted about the Government’s abandonment or, more charitably, nuancing of its fiscal principle around keeping public service growth at the same rate as population growth. I also spoke about how the Government appears to be taking the opportunity to boost spending on a permanent basis and how, unlike the NSW Government, it doesn’t appear to have a plan for stabilising and then reducing debt metrics over the course of the decade. You can listen to our conversation from around 51:50 on the audio recording of:
I also made the point that the bulk of the additional debt the Queensland Government is accumulating is to fund the large operating deficits over the forward estimates. This is a point Nick Behrens nicely made in his QEAS Qld Budget Update, in which he wrote:
…the reality is Queensland will add another $60 billion in debt over just six years. That is on average $10 billion each year and of this two thirds are being accumulated through bad debt where we are spending more than we are earning to run government each day. The other third is good debt being invested in infrastructure that will deliver economic growth in future years.
Great observation, Nick.