The Queensland government’s controversial decision to increase royalties on record-high coal prices has contributed to an unexpected $10bn revenue windfall and a record surplus, allowing the state to fund cost-of-living relief, including free kindergarten classes and $550 electricity rebates for all households.
The treasurer, Cameron Dick, on Tuesday handed down Queensland’s 2023-24 budget, which offered a rare opportunity for a government to pitch itself to economic conservatives – via a record surplus and debt reduction – while at the same time spending big on households struggling with inflationary pressures.
At the heart of this year’s budget is the increased revenue generated by coal royalty hikes – a measure announced last year that has faced significant opposition from the mining sector, including a $40m advertising campaign by the Queensland Resources Council.
The budget papers reveal income of more than $15bn from coal royalties in 2022-23 – about $10bn more than had been forecast 12 months ago – due mainly to sustained high coal prices, which trigger the increased royalty rates.
The boost has allowed the government to frame its 2023-24 budget as a Robin Hood-style affair – portraying miners as greedy for complaining while they rake in super profits, while marking the budget papers with a “tackling the cost of living” stamp.
“We can deliver our state’s biggest cost-of-living program, our state’s biggest building program and deliver lower debt for one simple reason – progressive coal royalties,” Dick said.
“Our decision to take on the mining lobby, to stand our ground and to fight for the people of our state has delivered a rich reward.”
The increased royalties income are set to push the 2022-23 surplus to $12.3bn, which Dick said was the largest recorded by a state or territory government.
The budget predicts Queensland will run a $2.2bn deficit next year, largely due to one-off spending measures.
Coal royalties also helped the state temporarily reduce net debt, which is now $5.9bn, instead of the $19.8bn forecast 12 months ago. By 2026-27, debt levels will have climbed back to almost $47bn, largely due to infrastructure spending.
Queensland will spend $8.2bn in 2023-24 on cost-of-living relief, including a $550 energy rebate for every household, with concession holders to receive an additional $150 discount on top of an existing $372 rebate, taking total support for this group to $1,072 in 2023-24.
Dick said the rebate was the most generous of all the states and territories and meant many Queenslanders won’t pay for electricity at all next year.
He said the rebates were a deliberate measure to assist households in a way that is deflationary, rather than putting cash directly into people’s pockets and potentially contributing to further inflation.
The government has also announced it will fully subsidise 15 hours a week of kindergarten (in Queensland kindy is the year before children start school). The measure is expected to save Queenslanders up to $4,600 a year in fees.
“It gives more Queenslanders the opportunity to return to work or to take on more work,” Dick said.
“We understand the economic potential that is unlocked by enabling more women to get back into the workforce.”
Dick also boasted a record $89bn will be invested in the state’s “big build” program over the next four years. The program will help provide critical infrastructure across the state ahead of the 2032 Olympic Games.
Those measures come on top of increased funding for health, housing and youth justice – all areas where the state government has found itself under political pressure in recent months.
Almost $2.9bn extra will be spent on health services over the next five years, including measures to reduce ambulance ramping and boost the state’s patient travel subsidy scheme.
The government will increase funding for social and affordable housing to $1.1bn, with $250m slated for housing and homelessness support services.
Youth crime is another focus of this year’s budget. The government has allocated $440m over five years for youth co-responder teams, policing and to help seniors secure their homes.
“This budget delivers what the people of Queensland need: comprehensive cost-of-living relief,” Dick said.
“No other government in Australia could promise this. And no other government in Australia could deliver what this budget delivers for Queensland.”
The opposition Liberal National party said the budget failed to deliver long-term solutions to the cost-of-living, youth crime, health and housing crises.
Shadow treasurer David Janetzki said Queensland would have “nothing to show” for the billions of dollars more than was previously forecast.
“After the rivers of gold dry up, Queensland will have nothing to show but the highest debt in our state’s history, the highest taxes and failing frontline services,” Janetzki said.
The Queensland Resources Council chief executive, Ian Macfarlane, said the budget “revealed the true extent in which Queensland relies on the resources sector”.
But the former federal Liberal resources minister said investor confidence had been “shattered” by the coal royalty increase and it would be an “enormous hit on the future viability” of the industry.
The Queensland Council of Social Service chief executive, Aimee McVeigh, welcomed rebates on power that would benefit all Queensland households and that would likely see some low-income households not pay electricity bills at all for the next financial year.
“People have been not turning on heaters, not turning on lights and not using power because of the pressure that the cost of energy is putting on household budgets,” she said.
