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Labor borrows big to keep Queensland going but there are limits

Sean Parnell reports in InQueensland (1.12.20) on the long-awaied release of the Palaszczuk government’s budget for 2020-21, revealing interesting parallels with government programs past and present.

‘On the key economic indicators, Treasury now believes unemployment will peak this year at 7.5 per cent, before dropping back to 6.5 per cent, which is still above pre-pandemic trends.

‘The budget has been characterised as a jobs generator but it has come at a cost, with an operating deficit of $8.6 billion this year and the budget remaining in the red until at least 2023-24.

‘Borrowings will increase dramatically, as the government avoids cuts and austerity measures, hitting nearly $130 billion at the end of the forward estimates. Treasurer Cameron Dick and Premier Annastacia Palaszczuk repeatedly said this was lower, on various measures, than NSW and Victoria.

‘Yet Queensland’s capital works budget of $56 billion over four years is still not as high as that delivered by the former Bligh Labor government in 2009-10 to drag Queensland out of the global financial crisis. At the time, debt was used only for infrastructure, however, under the third-term Palaszczuk government, short-term capital purchases are lower and there is a paucity of detail about future spending. The projected spend includes already includes a surge in Cross River Rail works.

‘Dick said the budget honoured Labor’s election commitments and provided more direct support to industries affected by the pandemic and recession. He appeared to suggest the capitals works program was appropriate given the economic and budgetary uncertainty.’

Queensland tipped to lead nation’s economic recovery as jobs ‘cliff’ fears fade

John McCarthy reports in InQLD (18.1.21) about new assessments of Queensland’s economic prospects after the Covid-induced downturn.

‘Queensland’s economic growth will be near the top of state economies and lead Australia out of the COVID-19 downturn, according to Deloitte Access Economics.

‘It has forecast Queensland to have growth of 4.6 per cent in 2021, only beaten by Victoria’s 5.3 per cent. In comparison, the Queensland Government’s historically conservative forecast is for 0.25 per cent growth in 2020-21 and 3.5 per cent in 2021-22.

‘But Queensland’s hard borders have come at a cost that other state’s have not had to endure.

‘Deloitte economist Chris Richardson also said the winding back of support measures in March, such as the JobKeeper wage subsidy, was now looking less dangerous than previously thought because the jobs market was doing so well.’

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