The Queensland Government will seek $25 billion in private investment as part of its drive to pay down the state's debt and recover its Triple A Credit rating.
Treasurer Tim Nicholls handed down his third Budget today – the last one before the Newman Government is due to face voters at an election in March next year.
The Government had previously flagged a blowout in its fiscal deficit for the 2014-15 financial year, to $2.27 billion compared with the forecast of $664 million in its mid-year review. Mr Nicholls predicted a small operating surplus of $188 million for the year, and said the fiscal result was expected to be a surplus of $862 million in 2015-16.
Unusually, the centrepiece of the Treasurer's presentation was the $25 billion dollar private investment program which the government says is a draft, and which therefore is not actually counted in the budget figures.
Mr Nicholls said state debt had now stabilised at $80 billion – down from the $85 billion projected when the government took office. But he said debt would grow again without significant action to pay it down.
The government's plan is for a range of avenues designed to attract private capital to existing state assets. In proposes to lease the ports of Gladstone and Townsville to private operators and to sell power generators Stanwell and CS Energy as well as water distributor SunWater Industrial Pipelines.
The Government has flagged a hybrid instrument for attracting private equity to its electricity transmission and distribution businesses Energex, Ergon and Powerlink. Under this arrangement, private sector investors would take over current and future debt for the organisations, and receive a dividend in return, but the State would continue to hold 100 per cent ownership.
The measures are expected to raise $33.6 billion, of which 75 per cent – $25 billion – would be used to retire state debt. The remaining $8.6 billion would be invested over six years in a range of new infrastructure projects, including roads, public transport, schools and hospitals and a $500 million "future fund" to pay for natural disaster recovery.
Mr Nicholls said the reduction of debt to $55 billion would be enough to recover the state's Triple A credit rating only if spending growth was also kept under control and revenues were strong.
Other Queensland Budget highlights include:
- Economic growth projected at 3.0 per cent – the strongest in the nation
- Dwelling investment to grow by 9.5 per cent in the coming year and 6.0 per cent the following year
- Reductions in revenue from payroll tax and coal royalties
- No new or increased taxes
- Health spending up 6.0 per cent to $13.6 billion
- Education spending up 7.0 per cent to 11.8 billion
- $5.4 billion for roads and transport, including $321 million towards the second range crossing near Toowoomba and funding for 75 new six-car trains
- A $44.5 million Safe Night Out strategy to address alcohol- and drug-related violence
- $406 million for child and family services
- $55 million for a reef water quality program
- 267 new police officers
Mr Nicholls said the government had achieved a 98 per cent reduction in dental waiting lists since taking office, a 40 per cent reduction in public housing waiting lists, reduced ambulance and hospital emergency department waiting times, and now had the lowest average wait for elective surgery in Australia.
Full details of the Queensland Government's Budget are available here. To arrange an in-depth briefing on specific areas of the Budget and how they may affect you, contact The SAS Group.
Click here to see the Queensland Budget at a glance.