Jobs and growth key to budget

NEXT week’s state budget will focus on delivering infrastructure and jobs and improved services in health, education, public safety and housing, Premier Jeremy Rockliff says.

The first budget of the Rockliff-Ferguson government will be handed down next Thursday amid a series of challenges including the lingering effects of the pandemic, rising interest rates, increasing inflation and looming cuts to the state’s GST revenue share.

Mr Rockliff said the budget would be aimed toward continuing strong economic growth but gave no hint whether a rare surplus might lie within the four-year forward estimates.

“What is important is that we maintain a strong economy and very clearly we will be demonstrating where we’ve got across the forward estimates very strong infrastructure investments, maintain that momentum of the economy, maintaining of course our jobs growth as well,” he said.

“We have of course, since 2014, seen an increase in job numbers of some 27,000 people, which is good and want to maintain that momentum.

“But also very important alongside a strong economy is delivering the services that people justifiably deserve across those important areas of health, education, public safety, and housing as well.

“We never shy away from the challenges and we’re (in a) challenging global environment at the moment.” Rising interest rates, increasing inflation and cuts to the GST loom as major challenges to the state budget bottom line in the medium term.

Treasury estimates of expenditure growth in the budget are based on a 2.3 per cent overall growth rate until 2024/25 – now well under the rate of inflation.

And the state government spends almost half the budget – an estimated $3.2bn – in 2022/23 on employee entitlements.

The government will face pressure to increase public sector wages as inflation increases. Every one per cent increase will add more than $30m to the budget bottom line.

Last year’s state budget lists had an estimate of $105m in annual borrowing costs next financial year, increasing to $114m in 2024/25 – plus about $300m for the cost of servicing unfunded public superannuation scheme liabilities even while interest rates are at historic lows.

Treasurer Michael Ferguson said he was burning the midnight oil putting the finishing touches on the budget.

“I’m genuinely throwing myself to the task of doing a good job and being thorough and making sure that it’s a quality product,” he said.

“But importantly, as well, you know, our message around our management of the finances is that we have the lowest general government sector net debt in the country of all the states and we need to obviously observe that, keep a close eye on it.

“But it’s a product of the pandemic and the hit that we took to the balance sheet so that we can support families and businesses.”