When Dick hands down the 2021-22 budget tomorrow afternoon, he will be giving his second budget speech in just over six months, after the 2020-21 budget was delayed by the pandemic. It will also be the first in a four-year term, giving Dick the benefit of having longer to chart an improvement before Labor seeks re-election.
The pandemic resulted in the government forecasting a $8.6 billion operating deficit this year, and the budget remaining in the red until at least 2023-24. Debt was expected to hit $130 billion by the end of the forward estimates.
While Dick insists the strong health response has allowed for a faster economic recovery, the budget will remain in deficit, although not as bad as first feared. Some gains have been offset by losses on the other side of the balance sheet; for example, the property boom has delivered more stamp duty, but the health system has required more funding to deal with unforeseen pressures.
The budget will also detail further borrowings, although Dick said debt would only be used to fund capital works, suggesting the government itself might again be self-sufficient. How the government seeks to balance the need for budget repair with its long-running commitment to service delivery remains to be seen.
“We’re going to continue to see strong investment in the core pillars of what defines Labor governments – health, education, housing, infrastructure,” Dick said.
“We’re not going to start reducing spending in those areas.”
Dick would not be drawn on whether there would be further economic stimulus but said, as Investment Minister, he had paid close attention to what the private sector needed to sustain economic growth and jobs.
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He noted the volatility and uncertainty of the pandemic, saying the Treasurer needed to keep a “weather eye” on the future and take a somewhat conservative approach to both expenditure and revenue.
“It’s not a time for contraction or an austerity approach to fiscal settings for the State,” Dick said.
Dick will use the budget to outline whether Labor has abandoned its previous fiscal principles around such issues as debt and public service growth, and the relevance of population growth. A new revenue stream will come from requiring interstate migrants to pay $78.75 to transfer their driver’s licence.
While the pandemic prompted the Palaszczuk government to freeze public service wages, and hiring, both have already started to thaw, and Dick will have to fund wage rises for public servants and bureaucrats (as well as MPs).