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Queensland Economic Advocacy Solutions

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Queensland Mid-Year Fiscal and Economic Review 2017-18

The MYFER is up and can be found here: https://s3.treasury.qld.gov.au/files/2017-18MYFER.pdf

My overall assessment is that it delivers an improvement in Queensland's budgetary position in 2017-18 and across the forward estimates.  This is technically Jackie Trad's statement but in reality it has Curtis Pitt DNA on it. It is extremely conservative in its revenue forecasts for 2017-18 based on current coking coal prices, employment growth and the beneficial impact this will have on payroll tax receipts and not factoring in increased population growth.  My guess is that this is deliberately the case and in June next year when the Treasurer, Jackie Trad, delivers her first State Budget for 2018-19 she will be announcing a significantly higher operating surplus for 2017-18 (unless of course we get smashed by another natural disaster in the mean time).

Key points are:

  • Forecast net operating surplus of $485 million in 2017-18, an improvement of $339 million on the Budget estimate. The improved position has primarily been driven by an uplift in revenue forecasts through an improved outlook for coal prices, stronger than anticipated national GST collections, four new taxes and increased returns from GOCs.  
  • Since the 2017-18 Budget, royalty revenue has been revised upwards by $806 million across the period 2017-18 to 2020-21. This is mainly the result of coal prices being higher so far in 2017-18, with the premium hard coking coal spot price averaging around $US190/t compared with a Budget forecast of $US138/t for the first two quarters of 2017-18. 
  • Public sector borrowings of $71.222 billion are projected at 30 June 2018, $767 million less than the 2017-18 Budget estimate and in 2020-21 borrowings are expected to be $305 million lower than anticipated in the 2017-18 Budget at $80.843 billion. 
  • An increase in the capital program over the forward estimates to $44.389 billion from $42.750 billion in the 2017-18 Budget. 
  • Forecast economic growth of 2.75% in 2017-18 and 3% in 2018-19 
  • Employment growth has strengthened significantly, with forecast jobs growth revised up from 1% at the time of the Budget to 2.25%. 
  • The forecast unemployment rate has been revised down from 6.25% at the time of the Budget to 6%. 

I have provided below four graphs that I think best describe the main points to note.

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Great analysis Nick.



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