The latest lukewarm snapshot of Queensland’s economy should serve as a “call to action” for both government and business to do more to drive growth, the report's author says.
Deloitte Access Economics' latest report on the state’s finances, the Queensland Quarterly Business Outlook, shows the state pulling in less revenue than it should be due to the falling price of thermal and coking coal internationally.
Jobs are the key to Queensland carving out a larger share of Australia’s economy and population, according to Deloitte.
That married with the government’s own assessment revealed in its mid-year fiscal and economic review in December, that debt had blown out by a billion dollars in six months as a result.
Deloitte Access Economics leader Dr Pradeep Philip said more broadly the report showed economic growth in Queensland was 2.5 per cent in 2019-20, down from the original forecast of 3 per cent.
“Housing construction activity has slid, partly in response to the earlier glut of apartment building, Dr Philip said.
“And so has business investment, much of which is still due to the completed work on big LNG projects, despite their timing being determined long ago.”
But while the short-term picture was not ideal, longer-term trends indicated good opportunities to turn the economy around, if the government and business seized them.
“Despite global trade tensions, uncertainty and ongoing drought, the government’s mid-year fiscal and economic review expects Queensland to continue its strong population growth, with low interest rates and the low Australian dollar helping to mitigate some of the negative impacts on the state’s economy,” Dr Philip said.
“With more people entering the jobs market, this improvement in the state’s participation rate is expected to pay dividends in coming years, with Queensland expected to carve out a larger share of Australia’s economy and population over the forecast period.
“But to do so, it is critical to keep a strong focus on jobs, jobs, and jobs, across Queensland.”
More people entering the jobs market is set to be a boon for Queensland, Deloitte says.
The financial auditor's report also noted the full effect of the summer’s disasters, including bushfires and floods in many parts of the state, had yet to be tallied.
The Queensland state budget is due to be delivered earlier than usual in April this year, ahead of the October state election.
The government is facing ballooning debt, forecast to hit $91.8 billion over the forward estimates, but has predicted a razor-thin operating surplus will be handed down.
But coal prices falling and ongoing natural disasters mean it is at risk of running into the red in an election year.
“While the budget remains in surplus, it is wafer-thin and could disappear far too easily," Dr Philip said.
"More needs to be done to keep expenditures under control and attention needs to be paid to the longer term balance sheet of the State."
Sourced from Brisbane Times - Written by Stuart Layt