Queensland Economic Advocacy Solutions

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QEAS Business Briefing - Queensland Government's Fiscal Update - July 2020

COVID-19's impact on Queensland Government's GST & other tax receipts (payroll tax, duties etc) coupled with an increase in expenditure to support the economy has delivered the two largest operating deficits in the State's history. The 2019-20 operating result will be a $5.9 billion deficit (the MYFER in December 2019 estimate was for a $151 million surplus) and the 2020-21 operating result will be a $8.5 billion deficit (the MYFER in December 2019 estimate was a $234 million surplus). Over the two financial years this represents a turnaround of $14.8 billion for the Queensland Government.

Compared to the MYFER (in December 2019) Queensland's General Government gross borrowings will be $16.6 billion higher and reach $59.4 billion in 2020-21. Combined with GOCs Queensland's public sector debt will now surpass $100.7 billion.

These results are however broadly consistent with what I would expect for any Government tackling COVID-19. One cautionary note - in any commendable effort to find savings, the Queensland Government should be careful about cutting spend on consultancies. The same approach in 2012 hurt the economy. The Queensland Government has recognised that austerity measures would hurt the economy and I would urge them to equally recognise that a reduction in consulting services provided by the private sector would also be a brake, not to mention the fundamental importance and need for receiving expert advice to deliver Government services to the people of Queensland more effectively and efficiently.


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