Government’ s budget gamble includes the kitchen sink

A ONCE-in-a-generation crisis like a pandemic calls for once-in - a- generation response.

Premier and Treasurer Peter Gut we in is rolling the dice that a massive pump-priming of the state’s economy will get us back on track. He says he’s “throwing the kitchen sink at it ”.

It is a budget for transport, housing and hospitals and schools, with law and order thrownin.

It’s a big-spending stimulus budget. But it us also a budget imagined by bureaucrats, not politicians with a bolder vision.

There are no projects which will transform the state or recast our state’s direction, but we will have better roads and bridges.

The aim is restore the state’s upward economic trajectory. It might do the trick.

But it’s a budget in which Mr Gutwein is taking two big risks. He’ s betting on the state’ s ability to deliver a lot of infrastructure over the next few years.

The state struggled to deliver $500m last year, his plan is to spend $1bn plus, every year for the next four years. Secondly, he’s betting that interest rates will stay low. Borrowing $4bn at 1.2 percent costs $48 ma year in interest. At 5 percent it is $200m a year. It starts to sound like a lot of money—and there is no plan and no timetable to pay it back, although the premier used the word “intergenerational” in his press conference.

It’s all not a problem if the plan works and the economy grows faster than the repayments, but a second wave of the pandemic and the things start to look tougher.

At the moment bringing down the state’ s projected record debt levels look like a problem for a future treasurer.

What are the chances of two once-in-a-generation events in quick succession?