The 2015 Queensland Budget essentially ignores the real issues in Queensland, or tries to make them vanish through creative accounting.
The budget documents themselves reach a new high in marketing excellence with the “Budget Highlights” document chock-full of infographics, adding to the impression that this is not a fair dinkum economic document.
The basics of the budget are:
- Government operating expenditure is forecast to grow by 4.1% per annum
- Government income is forecast to grow by 4.3%
- Queensland economic growth is forecast to be 4.5% next year
- Unemployment is forecast to remain at 6.5% for next two years and then reduce to 6.0% in the third
- There is increased spending in health ($1.85bn over three years) and education, but reduced spending in infrastructure ($1.1bn deferred)
- Government debt is reduced by $7.5bn in the next 12 months and $9.6bn by 2017-18 but
- $3.4bn of this is taken out of the public servant long service leave pool; $2bn comes from deferring contributions to the public service defined benefit scheme; and $4.1bn is transferred across to the energy businesses.
- As a result net financial liabilities actually increase from $35.891bn this year to $36.174bn in 2018-19
- Increases in spending are often partially covered by scrapping programs of the previous government.
- This is disguised by headline announcements designed to distract attention, such as the Advance Queensland fund (a rebadged Beattie Smart State-type program).
Bottom line is that even with highly optimistic economic assumptions state debt and employment go nowhere.
If Queensland experiences the same growth the rest of the country expects, then expenditure will outstrip income by around 2% and a failure to invest in infrastructure will actually hold state productivity back.
At the same time, off-balance sheet liabilities are being piled-up, leaving the next generation, the one that supports Labor most heavily, with the invoice.
Over the next few days we will be publishing analysis that looks at the budget in more depth.