THE State Budget is expected to return to surplus ahead of schedule, according to the Queensland Mid Year Fiscal and Economic Review released today.
Queensland Treasury has forecast a $60 million surplus for 2014-15, one year sooner than originally anticipated.
State Deputy Premier Andrew Fraser praised the result in light of recent natural disasters and continued fall-out from the European crisis on global economic conditions.
"By returning to surplus one year early in 2014-15, we send a clear message that Queensland's finances are strengthening and that we as a state have the capacity to make the choices needed – as we've already proven over the last few years,” says Fraser.
"The Bligh Government delivered jobs during the global financial crisis; we are delivering a massive recovery and reconstruction effort after the natural disasters; and now we're delivering a surplus one year ahead of schedule.
"This Budget update demonstrates we are prepared to make the right choices to strengthen the state's finances and guide our state through the latest global economic turmoil."
Fraser says several government decisions were made to add $737 million to the bottom-line.
Changes include the shelving of a new police academy at Wacol, higher requirements for the Voluntary Separation Payment program, competitive bidding for exploration permits, application of duty for transfer of exploration permits and deferred abolition of duty for transfers of core business assets.
"With the uncertainty all government's face thanks to the sovereign debt crisis in Europe and the US, we have had to make tough decisions to keep our finances in check,” says Fraser.
"In the current climate, similar decisions have been made by every state government - New South Wales, Victoria and Western Australia all made significant revenue and expenditure decisions in their mid-year reviews."
However, state shadow treasurer Tim Nicholls warns the Queensland economy is still hurting.
“Queensland already has the highest unemployment rate in mainland Australia and the budget update predicts even more Queenslanders will join the dole queues,” says Nicholls.
“This budget update does not deliver for Queensland families.”
He claims the projected surplus is partly due to natural disaster payments from the Federal Government.
“Strip out the one-off disaster payments from the Commonwealth and the underlying deficit for Queensland over four years is more than $8 billion.”
Estimated costs for the 2011 floods and Cyclone Yasi reconstruction effort increased due to ongoing reconstruction applications from councils. Total expenditure on the 2011 natural disasters is estimated to be $7 billion with works totalling more than $2.7 billion completed or underway, according to Fraser.