This week when delivering the 2018-19 Queensland State Budget, the treasurer Jackie Trad took a walk on water. Nothing would deter her delivering a budget full of billions of promises. All the treasurer, premier and the Labor government must do now is to follow her and walk on water. Can it be sustained or will they soon be “trading” water or should that be spelt “treading” water?
There was no mention of the “D” word, that is DEBT in the treasurer’s inaugural budget speech. Queensland’s debt is expected to blow-out to $83 billion by 2021-22 and there were “no apologies for borrowing to invest in infrastructure”. Given the smile on her face, Jackie Trad, seemed rather happy in announcing the “big spend” as she walked on water in denial about Queensland’s debt. She wants to change the conversation too. This means, let’s not talk about debt. Look at me, Queensland will be fine, I’m walking on water!
Would you like to change the conversation? I would. I would like to change the conversation and talk about how the State can start paying down the huge debt!
It is a very different story in New South Wales, just over the border. The government in their 2017-18 budget delivered a 4.5 billion surplus and by now it was projected the state will be debt free. But not so for Queensland – spending money we do not have and then borrowing more to pay off what we borrowed! I found it ironic that on the Queensland Government website they give advice to Queenslanders, stating, “when we’re low on cash and want to buy something, it can be very tempting to borrow money. But before you use your credit card, take out a loan or borrow from the store, make sure you know how much it will really cost you”. Should the Labor government follow their own advice?
Under Labor Queensland lost its AAA credit rating, the top credit rating. Now we have AA+1 by 2021-22 will this be AA- or worse? What will life be like if the state becomes bankrupt? Are Queenslander’s adequately informed about the state’s financial mess? However, it seems that Queenslander’s focus on the “what about me” or “what will I get out of it” rather than realising the State is drowning in debt. Every day we are getting “deeper and deeper in debt” while so many take the mythical walk on water.
Certainly, Queensland is behind with its infrastructure, a legacy of earlier Labor governments. Queenslanders were not happy with the Newman Government because Campbell Newman was making the tough decisions, cutting back to get the state out of debt. The response? He was voted out after one term.
It seems that most people in Queensland like living with a huge debt hanging over their head. Or is it a case of too many plastic cards, too much credit, too much taking what we want now, rather than delaying our gratification! Have a look at the debt clock. The debt in Australia is in the trillions. How long will it be before we are talking in quadrillions?
On the 26 June 2016 I wrote a post titled “Super Slippery Slide”. Some of this is worth repeating. I asked a few “what if” questions. What if the $4bn taken out of QSuper can’t be repaid? What if the Queensland government plummets into further debt? And what if the economy becomes more volatile and the QSuper fund loses money given the current and future global financial situation?
Further I went on to say that one ‘blackhole’ that is a ravenous consumer of $’s in Queensland is the public service payroll. As at June 2014 there were 195,724 Full Time Equivalent (FTE’s) staff in the state. The number of Queensland employees as of December 2015 FTE was 205,529. There was an increase of 312 staff for the September 2015 quarter (0.15% increase). The government today is on a trajectory to spend its way into further debt through increasing the number of public servants which in 2015-16 was more than double the government’s budget projection.
As of December 2017, there were almost 219,000 FTE’s public-sector employees. That’s fine, just borrow more money. After all, we have a government in Queensland who can walk on water. No “trading” water after all! All we have to do is watch out for the storms ahead!