
Queensland's Treasurer, David Janetzki, recently disclosed that the state's financial outlook is deteriorating, with the budget facing a deficit of more than $9 billion instead of the projected surplus of $887 million for 2026-27. Additionally, the forecast for the 2027-28 financial year indicates another deficit of over $9 billion, a stark contrast to the previously anticipated $2 billion surplus.
The update from the Mid-Year Fiscal and Economic Review (MYFER) also highlights a substantial increase in total state debt, which is now projected to reach $218 billion by the end of the forward estimates. This figure is significantly higher than the initial forecast of $172 billion made by the previous Labor government. Treasurer Janetzki emphasized that these figures reflect the debt and deficit legacy left by the previous administration, indicating a challenging financial situation ahead for Queensland.
Amidst concerns of a potential credit rating downgrade, S&P's Director of government ratings, Anthony Walker, expressed reservations about the state's financial position, suggesting that a lowered rating may be imminent. The impact of falling coal prices and a decline in coal exports have further exacerbated the financial challenges, leading to a substantial shortfall in royalty revenue for upcoming financial years. The increase in government spending and projections of higher public service wages have added to the financial strains faced by Queensland, with significant funding shortfalls identified for frontline services and programs.