Australia: Queensland spends – ANZ

Coal royalties boosted revenue in Queensland’s last budget before its next election, but GST and state tax revenue are expected to be lower across the coming four years, suggests the research team at ANZ.

Key Quotes

“In the 2017-18 Budget released yesterday, the Queensland Government also boosted projected policy expenditure across the forward estimates and increased capital spending, including by allocating an additional AUD1.95bn over the life of the Cross River Rail project and entering into Public Private Partnerships, totalling AUD2.38bn. The Government expects Gross State Product growth to increase from 2.4% in 2015-16, to 2.75% in both 2016-17 and 2017-18, and 3% in 2018-19.”

“We expect Cyclone Debbie to have subtracted three-quarters of a percentage point from economic growth across 2016-17 and 2017-18. Net debt for the General Government Sector is, in our view, to be AUD300m lower in 2016-17 than at the last update, due to the improved royalty receipts and changed timing of the capital spend, but debt is likely to then increase again to fund priority infrastructure projects. For the non-financial public sector, we anticipate net debt will reach almost 12% of GSP in 2020-21.”