Revised $2 billion surplus for 2016-17 – largest in a decade
Treasurer Curtis Pitt says the expected surplus for the 2016-17 State Budget has been revised upwards to more than $2 billion – up from the $867 million estimated in June at the time of this year’s State Budget.
Releasing the state’s improved economic positon at the 2016-17 Mid-Year Fiscal and Economic Review, Mr Pitt said the $2.026 billion surplus was the largest net operating surplus since 2005-06 and followed the recent upward revision of the 2015-16 surplus from $152 million to $970 million.
“This is the Palaszczuk Government’s second consecutive net operating surplus and it highlights the strengths of Queensland’s diversified economy, and the challenges Queensland faces in the transition away from mining investment to broader based growth, particularly in regional areas,” he said.
“Economic growth is expected to be strong in 2016-17, reflecting the ramp-up in LNG exports and is expected to be largely driven by growth in overseas exports and a return to positive growth in state final demand (SFD, a key measure of economic activity).
“Based on latest Commonwealth and state government publications as at 8 December 2016, Queensland is expected to have the fastest growing state economy in 2016-17 with 4% and 3 ½% in 2017-18.”
Mr Pitt said while higher than expected revenue from export coal royalties had contributed the lion’s share of the revised surplus, the Palaszczuk Government’s economic plan and responsible management of the state’s finances would see a continuation of the gains already made in rebuilding the state’s $300 billion economy after the Newman-Nicholls Government.
“When announcing the revision of the 2015-16 surplus I said we would not be accepting higher resource royalties as the ‘new normal’,” Mr Pitt said.
“We will continue to drive our economic plan to protect the gains made so far while providing effective, targeted support to create jobs especially in regional Queensland and effective and targeted cost-of-living relief in a financially responsible manner.”
Mr Pitt said the new support included:
a $200 million Jobs and Regional Growth Package incorporating an extra $160 million on top of the existing $40 million Industry Attraction Program, and
a $200 million two-year Works for Queensland program to support local councils across the state undertaking job-creating, maintenance or minor infrastructure projects.
He said cost-of-living initiatives funded through the MYFER included the government’s $180 million response to the Queensland Productivity Commission’s inquiry into power pricing:
$170 million over four years to extend the existing electricity rebate to an estimated 157,000 households holding Commonwealth Health Care Cards who will save up to $330 a year from 1 January 2017 with all current recipients of the rebate retaining it,
a $10 million package to support regional business operators by helping them better manage their power consumption with the aim of lowering their bills.
“We will be carefully monitoring revenue trends and implications in the lead-up to the State Budget next year.
“In fact while still predicting healthy surpluses across the forward estimates, the MYFER forecasts show royalty revenue up on Budget estimates but at much lower levels than we have seen from the recent rapid increase in world coal prices.
“Even prior to the MYFER revision, and despite the challenges of global economic circumstances, our economic plan has delivered higher growth, lower debt, and lower unemployment – all without the asset sales Tim Nicholls still wants to promote.
“Our economic plan is helping to further diversify Queensland’s already strong, diversified, and growing economy and transition it to a post-mining boom economy.
“We have lifted business confidence, we are working with business to invest in innovative new industries and building on our traditional strengths to generate jobs now and for the future.
“The MYFER outcomes show we are on track for nation-leading economic growth and we are making the right investments in job-creating infrastructure and frontline services while recognising the needs of regions doing it tough as we transition to a post-mining boom economy,” Mr Pitt said.
2016-17 Mid-Year Fiscal and Economic Review
Key fiscal aggregates – general government sector
Net operating balance