Queensland treasurer David Janetzki has promised a budget surplus in 2029-30, the year after the state’s next election, but only after enduring years of billion-dollar deficits. Handing down his second budget on Tuesday, Janetzki forecast relatively positive economic growth and a strong labour market despite volatility caused by the conflict in Iran, with billions more in coal royalties flowing to the state.
Coal Royalties and Economic Outlook
The state will earn $6.9bn in coal royalties in 2026-27 alone, up from $4.79bn in 2025-26, according to the budget. This increase is driven by a 6% rise in exports in 2026-27. However, despite a forecast recovery in coal prices, Queensland continues to teeter on the edge of a credit rating downgrade.
“Labor’s legacy left us highly likely, or even an air of an inevitability, to getting a rating downgrade, but I’m not giving up,” Janetzki said. “We’re not giving up because we’re making the budget improvements while delivering what we promised.”
Deficit and Debt Projections
The budget forecasts a $6.17bn deficit for the current financial year, followed by a $1.9bn deficit in 2028-29. State borrowings are expected to top $202bn in 2028-29, rising to $216.5bn by 2029-30, when a $619m surplus is projected. The operating deficit this year is $6.2bn.
In February, rating agency S&P affirmed a negative outlook for Queensland government debt. On Tuesday, S&P said the state’s fiscal recovery would likely be harder than expected due to rising wage costs and public health services, though aided by slower increases in capital spending. “Queensland … still has a very weak fiscal position,” S&P said, noting the state’s operating deficit was likely the largest of all Australian states in fiscal 2026, reaching about 6% of operating revenue.
Spending and Savings Measures
Government revenue is set to increase 5.1% over the forward estimates, driven by increases in duties, payroll tax, and royalties. Spending will grow from $100.8bn in 2025-26 to $111.6bn in 2029-30. The government says it is committed to returning the budget to a “fiscally sustainable position through strong expenditure management,” with expense growth dropping from 4.9% in 2026-27 to an average of 2.6% over the four years to 2029-30.
Half a billion dollars will be saved through better coordinating procurement, reducing the cap on senior executive positions, and cutting spending on contractors and consultants. The budget allocates $119.2bn for new roads, transport projects, and other infrastructure over the next four years.
Cost of Living Relief and Tax Measures
Premier David Crisafulli said the government had fulfilled his promise of no new or increased taxes. “We haven’t taken the easy road, haven’t found justifications to whack people with new taxes under the cover of global crises,” Crisafulli said on Tuesday. Compared with Labor’s last budget, there is limited short-term cost of living relief, with Crisafulli saying there were no “sugar hits.”
Measures include: exempting first home buyers from stamp duty when building or buying a new home; extending the $30,000 First Home Owner Grant; increasing the Back to School payment by $50 to $150 for school supplies; freezing bulk water prices for two years, saving about $130 for residents in Southeast Queensland; continuing free kindergarten for another four years (15 hours per week for all four-year-olds); funding the 50 cent fare scheme, which will be legislated; and funding the Queensland revenue office to pursue existing tax and penalty debt, expected to raise about $220m in revenue and $612m in debt recovery over four years.
Olympics and Infrastructure
The 2032 Brisbane Olympics pose another challenge for the state budget. Crisafulli noted the state would spend more than twice as much on health infrastructure as on the Games. The government has yet to break down the budget for Queensland’s 17 Olympics venues beyond the global $7.1bn figure for the Games as a whole. Crisafulli defended this decision, stating, “I’m very, very confident about the $7.1bn figure for the games venues.”
The budget does not include construction funding for the long-awaited Borumba pumped hydro scheme nor money for multiple smaller hydroelectric projects promised by the LNP at the last election.
Opposition Response
Labor said Queensland had “lost the budget state of origin,” pointing to cuts to car registration and tolls in New South Wales. Opposition leader Steven Miles accused the government of “delaying $4.9 billion worth of infrastructure, mostly in transport and main roads and health” and “walking away” from its pumped hydro policy.
