With the election over, parliament sat last week for the formal opening of the 57th Parliament. This was full of ceremony, with the swearing-in of new members and the Queensland Governor giving the government’s address on their plans for this term.
Then – Finally – the Budget
But for many Queenslanders, this week was the true start of the new parliament. It was the Budget sitting and we were all curious. For over 500 days the Palaszczuk Government would not deliver a budget. Even prior to an election, they would not deliver this budget.
It is unheard of that Queenslanders should be asked to vote blind. So, what was in it?
Blarney to the Seventh Power
It wouldn’t be an ALP budget without a bit of blarney. The blarney was that figure of $4 billion, repeatedly cited by the Premier and the Treasurer during the election campaign.
This was to be the total increase in Queensland’s borrowings. Labor used that figure to seek a mandate from Queenslanders for four more years. Turns out they were wrong by a factor of seven. The true figure was $28 billion.
Still, Why So Secret?
I can’t really tell you why. The budget was one I would describe as “ALP business as usual”. As I said in my speech, it is a budget without surprises and, therefore, no new hope for country Queenslanders either.
Business As Usual Won’t Cut It
You may recall, in August, the Queensland Productivity Commission warned us that “business as usual” was no longer an option for Queensland.
In a major report on Queensland’s economy, the QPC said bluntly that a post-COVID return to regular policy settings would be a disaster that would limit growth in the living standards of Queenslanders.
This week’s budget shows that unfortunately these regular policy settings are still the plan. The results are likely to be as easily predictable.
So, What is the Debt?
The State’s deficit will balloon to $130 Billion over the forward estimates.
In talking down that figure, Treasurer Dick made much of the fact that NSW and Victoria are taking advantage of low interest rates to increase their borrowings, too.
It is about post-COVID repair in a low-interest rate environment, runs the argument.
Apples and Oranges
The context may be true, but Treasurer Dick is comparing apples and oranges. NSW and Victoria are in a totally different space to Queensland. In fact, there are two key differences we can’t ignore.
Borrowing to Invest
Both NSW and Victoria were in a much better position to borrow, where Queensland was already staggering along under a huge debt load.
Queensland’s debt was already so high that we no longer have a AAA rating. NSW and Victoria are still AAA rated, and so pay lower interest rates.
Investing to Earn and Grow
But secondly, and I think most importantly, they both have ambitious visions for investing those borrowings in actual infrastructure that will earn money. They are also investing in reforms and tax incentives to grow their economies.
In other words, they are borrowing cheaply to invest in expansion and it will pay them back big-time.
Borrowing to Keep the Lights On
In contrast, Queensland’s borrowings are just as high, but instead of using it to create intergenerational assets, we are essentially borrowing to “keep the lights on”.
How Does the Budget Show This?
A simple comparison is what happens to the net worth of the states, over the forward estimates.
QLD – 0.8 % Growth in Value
Queensland will borrow an additional $28 billion to achieve an increase in net worth of 0.08 per cent. Yes, not even 1 per cent. Technically we are not going backwards, but figuratively we are just holding on by the skin of our teeth.
NSW – 13 % Growth in Value
NSW is borrowing $62.5 billion over the next four years to drive a 13 per cent increase in the state’s net worth. As this investment boosts earnings, the value of the NSW government balance sheet will increase by nearly $30 billion in net terms over the next four years. This represents a 47 per cent return on debt borrowed for NSW taxpayers.
Slipping Further and Further
NSW is taking advantage of low interest rates to build wealth for tomorrow. Queensland is mortgaging our future to keep the doors open for business as usual. For lack of economic leadership, we are slipping further behind.
Stealing Future Capacity
Worse still, when interest rates go up again, as they most surely will at some point, our borrowings and the interest bill that goes with it will savagely limit our ability to respond to future emergencies like flood, cyclone, fire and drought. In Queensland, we know those emergencies are a regular feature of life.
As LNP Opposition Leader David Crisafulli told the House, “Labor has rolled the dice on debt, but it is to put fuel in cars and pens on desks, not to build roads to ease congestion and dams for economic opportunity”.
Revenues Anaemic Too
Unfortunately, revenues are looking weaker too. The Premier has publicly confessed her concerns about the impact of the China trade tensions on our coal export revenues. Drought is hitting our agricultural exports and the border closures have meant no export earnings from tourism.
What About GOC earnings?
In the past, the Palaszczuk administration has reaped earnings from Queensland’s government-owned corporations including power, rail and water assets.
What’s a GOC?
Government-owned corporations are intended to operate like a commercial business and return the profits to the government. Queensland GOCs include bodies like Sunwater, Ergon/Energy Queensland, Powerlink and Queensland Rail.
You Can Hide Debt in Them
Remember a few budgets back, Treasurer Jackie Trad transferred government debt to these bodies in order to prop up her budget figures. We are paying the price now, one way or another. This week’s budget revealed the Government will have to be putting money into them, not taking it out.
But Not Forever
As the Courier Mail’s Steven Wardill wrote today, in order to keep the costs of power, water and public transport affordable, the government plans to pump twice as much money into these entities as it receives back, and every bit of that cash will be borrowed.
While your vehicle Rego will increase, public transport fares in SEQ have been frozen.
What the Budget Means for Gregory
As the member for Gregory, I spoke in the House about what we needed to see from the budget. You can read my speech here.
What concerns me most is that we are seeing even less investment in Gregory than they are in coastal regional Queensland. This is government from Brisbane, for Brisbane.
I am grateful for the continuation of the Drought Relief Assistance Scheme, as all of Gregory is still in drought. Those predicted La Nina rains keep getting pushed back and people are on tenterhooks.
I am also grateful for more funding for wild dog fencing, which is crucial if we are to bring back the strength of the wool industry in western Queensland.
But I am bitterly disappointed that we are not investing enough in agriculture. In fact, $44 million has been cut from the DAF budget. I spoke about this topic in a Private Member’s Motion. You can read my speech here.
An investment in agricultural capacity and research will quickly repay Queensland many times over.
Investing in our Skills Base
But my biggest disappointment is that when we should be investing in skills for the future, we missed out in terms of funding for trade skills training while the Longreach Pastoral College and the Emerald Agricultural College remain closed. No Plans were announced for either campus and no budget lines allocated funding for future uses.
Despite the election promise of renal dialysis for Longreach, I can find no line item for this in the budget.
A Budget Like a Bus
This budget was a bit like a bus – there’ll be another one along shortly. In six months to be precise. I suspect the department is already working on it. I will be advocating as loudly as I can for Gregory to receive proper investment for our future.
Next week will bring Estimates sittings which will run until December 15, but I suspect many families will have pulled up stumps by then so I want to take this chance of passing on greetings of the season.
Thank You to all the Volunteers
I sincerely thank everybody in Gregory who volunteered their time and effort in anyway this year. From schoolrooms and tuck-shops, to shows and rural fire brigades, there are so many vital things we need that we wouldn’t have without our volunteers. Your efforts are not only noticed; they are deeply appreciated.
Facemasks and Travelers’ Tips
If you are planning to travel these holidays, please do so safely. If you are flying, take facemasks. Different states and territories have different COVIDsafe restrictions, so check before you travel unawares.
Let’s all hope the borders stay open and there is no community transmission of corona virus to change Jeanette Young’s mind. This link will take you to the latest announcements.
Drive (Very) Safely
If you are driving, remember to take it easy and observe the fatal five. There has been an appalling road toll this year and we want all our people to come back to us safely.
Holidays for the Gregory Offices, Too
After a year that has been “full-on” for my staff, I have taken the decision to close both offices for holidays from December 21. You will still be able to ring and leave a message – and these will be checked regularly. Otherwise there are strict instructions to take a well-earned break! I hope you can too.
May the Christmas Miracle Be Rain
I wish each and every one a safe and happy Christmas and a wonderful 2021. Most especially, may the blessing of rain be upon us all – the soft, sweet rain.
Lachlan Millar MP
Member for Gregory