Borrowing beyond capacity fuels inflation and housing crisis

Executive Director of the Australian Institute for Progress Graham Young says that the 2024-25 budget delivered by Treasurer Cameron Dick is a political document not an economic one.

“It takes the smash and grab Tatts Lotto windfall from coal royalties to bribe voters with one-off ‘cost of living’ measures while the Treasurer implores voters not to judge the government on its performance, only on its promises.

“The best predictor of future performance is past performance, and we’ve now had 9 years since Labor came to government in each of which the financial situation of the state has deteriorated.

“Queensland has real problems, and the government is paying Queenslanders with their own tax dollars not to notice it has no solution to them.

“These problems are debt, spending, population growth, electricity, infrastructure, the Olympics, government waste, centralised economic planning, and sub-par performance in health, education and housing.

“Apart from that everything is fine.”

Mr Young said that the treasurer had challenged Opposition Leader David Crisafulli to layout his debt repayment strategy.

“Fair enough, but where is Mr Dick’s strategy? The unrealistic estimates for income in the budget, despite the loss of $22 billion of coal royalties over the forward estimates, don’t bear scrutiny.

“He’s certainly not going to get costs down in any significant way by encouraging public servants to work from home so he can save on rent. That will just decrease public service productivity and increase poor service.”

Mr Young said the most pressing problem was housing, but there was nothing in the budget would make a significant difference.

“Stamp duty reductions and increased help for first home buyers are all well-and-good, but what’s the point if there are not enough houses to buy..

“The biggest problem the state can control in housing is that it is trying to run the state economy beyond capacity, so someone has to lose access to resources, and when it comes to hiring construction workers and buying materials, it is home buyers who lose out to the government.

“It also contributes to inflation, which is challenging families in the supermarket and everywhere else they spend their dollars.

“The sign the government is operating the state beyond capacity is in the rapid build-up of debt.

“The problems are compounded by non-budget items like sweetheart deals with the CFMEU which put the cost of all building up about 30% further fuelling inflation, and the federal government’s extraordinary migrant intake.

“The only mention of inflation in the Treasurer’s speech was when he boasted he could keep the headline CPI down by subsidising power bills. That won’t fool anyone, particularly not the Reserve Bank.”