Labor’s $3b election war chest as Budget horror hidden
The Queensland Labor Government has built itself a $3 billion war chest for fighting next month's election, as debt soars past $100 billion and coronavirus carves an $8.36 billion black hole in the state's finances.
But Queenslanders will need to wait until a month after they vote to find out the full horrors of the Budget, with the long-awaited economic update only revealing the bad news to the end of this financial year.
The dire figures were revealed as total debt balloons out to $101.9 billion in 2020-21, up from the $100.7 billion predicted just two months ago.
A 2019-20 surplus of $151 million forecast in December's Mid Year Fiscal and Economic review has transformed into a $5.898 billion deficit and will further widen to $8.136 billion in 2020-21 - $364 million better than forecast in July.
Unemployment is forecast to reach 8.5 per cent in 2020-21 rather than the 6 per cent rate hoped for in December, with more than 138,000 Queenslanders having already their jobs.
The economy will grow by an anaemic 0.25 per cent this year and resource exports, particularly coal, have been badly hit.
Mr Dick said the economy was better than other states thanks to strong border measures that had helped claw back jobs lost earlier in the pandemic.
He said Treasury did not factor a reopening of state borders into its figures, although it does assume international borders will be closed until at least mid-2021.
Escalating debt was impacted by a two-month extension of the payroll tax holidays for struggling businesses until August and continuing to waive payroll tax on JobKeeper payments, which will cost $925 million in lost earnings.
The government will also borrow $1 billion to invest directly into businesses to create jobs in a move that got a mixed reception from business groups.
That includes $500 million so that publicly owned energy companies can invest in renewable projects to help the state create three new renewable energy zones and meet Labor's target of 50 per cent renewable energy by 2030.
Another $500 million will be invested in reputable small and medium-sized Queensland businesses that require capital to grow.
The money is part of $4 billion in new stimulus being borrowed.
But taxpayers remain in the dark on what the remaining $3 billion is for, with Mr Dick saying that will be announced "in the coming weeks and up until the election".
The Government will also undertake an audit to collect an extra $488 million owed to it over the next three-and-a-half years.
Mr Dick said he had no choice but to borrow more to protect jobs, but low interest rates meant that was entirely serviceable.
"We don't have any intention of increasing taxes and revenue at this stage," he said.
"I cannot say what the future holds."
The update gave just two years of predictions, rather than the usual four, with Mr Dick saying conditions were too unpredictable for reliable forecasting past June 30 next year.
Instead, Mr Dick said he would deliver a full four-year Budget the week beginning November 30, should Labor be returned to power.
Meanwhile, a decision to bring Building Queensland into the Treasury department as well as the Queensland Productivity Commission and task it with cutting red tape under national reforms was criticised by the Property Council of Australia for restricting their independence and leading to "more politically-driven decision making".
CCIQ economist Jack Baxter there was finally some transparency around the government's planned expenditure, with the COVID crisis not the time for tightened spending.
"Without large volumes of government spending today we risk the ability to rebuild and recover for tomorrow," Mr Baxter said.
Opposition Leader Deb Frecklington slammed the Government as being "debt deniers" and took aim at them for announcing an "election slush fund" paid for by taxpayers.
She said it was "a bit rich" Mr Dick was unable to produce a full budget when he had the resources of government behind him.
Originally published as Labor's $3b election war chest as Budget horror hidden