After the State Government released its economic update showing a budget deficit of $5.9 billion for last financial year and $8.5 billion for this year, Conus’s Pete Faulkner said the Queensland economy could have been in a lot worse shape had it not been for deft handling of the COVID crisis.

Faulkner said the financial dividend for the way the Palaszczuk Government dealt with the virus was about $2.2 billion, a figure that was likely to grow if it avoids further shutdowns.

“We will never know what the economic situation might have been without the kind of suppression measures taken, let alone what the human costs might have been,” Faulkner said.

“In my opinion, the position taken by the Queensland Government – either by design or simply because they got lucky – seems to have trod the narrow path between saving lives and not destroying the economy fairly well; there will be plenty who disagree, either on political or economic grounds, but there’s no way of really proving any of us right or wrong.”

He said with a projected decline in the Queensland economy of 4.8 per cent the gross state product was $345.3 billion, or a loss of $17.4 billion.

“However, if Queensland’s economic result had only been as good as Australia’s (down 5.4 per cent on my forecast) then the decline would have been $19.6 billion, an additional fall of $2.2 billion. So on that basis the better health outcome has been worth $2.2 billion to Queensland’s economy in 2020.”

He said Queensland was probably at or near the peak of unemployment with a rate of 7.7 per cent, higher if those on JobSeeker were counted.

He said by the end of the year, the jobless rate in the Whitsunday region was likely to hit 17.3 per cent. The next worst would be the Douglas region around Mossman on 14.7 per cent. Ipswich was likely to get to 10.4 per cent and the Sunshine Coast 9.8 per cent followed by the Gold Coast on 8.5 per cent.

Queensland Treasurer Cameron Dick said GST receipts to Queensland will be cut by up to $2.5 billion in the current and previous financial year, compared to the mid-year economic review

“Combined with the $1 billion fall in revenue from state taxes and royalties in the second half of 2019-20, the GST cuts mean that Queensland faces a fall in revenue since MYFER of at least $6.5 billion over 2019-20 and 2020-21,” Dick said.

“As our revenues fall, our expenditure has grown through the $6 billion in initiatives we have implemented over the last six months to protect Queenslanders health, Queensland jobs and Queensland businesses.”

Treasury has projected national unemployment could get as high as 9.25 per cent by the end of the year but Faulkner said this was far higher than his projections, which suggested that Australia was currently at or near its peak.