With the release of their plan to sell and lease some assets after the next election, the state government has shifted attention away from their budget. Though in truth, it would have been quite easy to distract people from this budget, because there is nothing new.
This is a boring budget.
We already knew that the ever-elusive budget surplus had disappeared. Two years ago I commented in The Conversation that: “The forecast for a fiscal surplus in 2014/15 is nice, but it is hard to take long-term budget predictions too seriously” and also that “it is easy to predict future austerity and surpluses, but it is harder to actually make it happen”. Time has justified that skepticism. The government’s original estimate for 2014/15 was a $0.7 billion surplus, but they are now expecting a $2.3 billion deficit.
Before the budget came down, Campbell Newman described it as a “once in a generation budget”. That is certainly what Queensland needed. Our long-term budget position is actually worse than the audit report or old budget papers claim, since they don’t factor in the growing fiscal pressures over the coming decades caused by an aging population. Put simply, current policies are unsustainable, and some tough decisions are needed.
The first thing to note is that the government decided to give up on fixing the 2012/13 budget.
They have allowed the operating deficit to increase from an estimated $4.9 billion (Audit) to $6.3 billion, and the fiscal deficit to increase from an estimated $9.5 billion (Audit) to $10.8 billion. This is perhaps understandable since the federal government has been playing games with their grants (shifting money around to try and manufacture a federal government surplus) and the lag time involved in reforms. So the real place to watch is the estimate for the 2013/14 budget balance.