On Friday 21 June 2019, I presented my thoughts on the economic outlook and the recent Queensland state budget at the Brisbane Club. I highlighted the positives (e.g. resource exports, international education) and negatives (e.g. low business confidence and subdued business investment across many sectors) in the Queensland economy, which are combining to deliver only modest growth. You can download my slides via this link:
I also noted the state government’s capital works program was expected to contribute to economic growth, as well as to Queensland’s ever-growing state debt. Queensland government capital purchases are increasing substantially in 2019-20, from $8.9 billion in 2018-19 to a budgeted $10.2 billion (a 15.4% increase). Relative to the size of the state economy, this will be the Palaszczuk government’s highest level of capital works yet, at 2.7% of Gross State Product (see figure below). Note, on current budget projections, it is expected to drop significantly in 2022-23 to 2.0% of GSP, but I expect the government will have found many new projects to invest in by then, so that may not occur. Of course, that probably means total state debt will increase beyond the currently projected $90 billion for 2022-23.
Gene Tunny, Director, Adept Economics