Fiscal position over time

The General Government Sector recorded a $4.296 billion operating surplus, a $7.781 billion improvement on the $3.485 billion deficit forecast in the 2021-22 Budget, and $2.381 billion above the $1.915 billion surplus estimated at the 2022-23 Budget. It marked a substantial turnaround from the prior year's restated $915 million deficit.

RoSF 2021-22, Outcomes Report — Net Operating Balance and Overview, p.3-1, p.3-6, p.3

GGS revenue grew 18.1 per cent ($11.394 billion) on 2020-21, well above the 6.1 per cent average annual growth of the previous decade. Other revenue (predominantly royalties and land rents) rose $6.563 billion, reflecting a temporary surge in coal and oil prices, while transfer duty rose $2.382 billion (60 per cent) and payroll tax $835 million (20 per cent) on a strong housing and labour market.

RoSF 2021-22, AASB 1049 Overview — Revenue, p.4-2 to 4-3, p.4

Net debt finished at $10.997 billion versus the original 2021-22 Budget estimate of $24.75 billion, as stronger operating cash flows reduced borrowing requirements and lower net debt rolled forward from the 2020-21 Outcome. The net debt to revenue ratio was 15 per cent, down from 18 per cent in the 2020-21 Outcome. The government invested $2.5 billion of the royalty windfall for future critical infrastructure.

RoSF 2021-22, Outcomes Report — Net Debt and Fiscal principles, p.3-2 to 3-6, p.3

GGS expenses grew 9.7 per cent ($6.183 billion) on 2020-21, well below revenue growth. Employee and superannuation expenses rose 7.2 per cent, reflecting the deferral of scheduled wage increases from 2020-21, growth in frontline services and higher defined benefit superannuation costs. Other operating expenses rose $1.727 billion on demand for hospital and health, child protection and family violence services, and grants expenses rose $2.104 billion.

RoSF 2021-22, AASB 1049 Overview — Expenses, p.4-3 to 4-4, p.4

The State Non-financial Sector capital program delivered in 2021-22 was $14.294 billion, $240 million higher than the 2022-23 Budget estimated actual. General Government purchases of non-financial assets were $7.889 billion, $356 million above the estimated actual, mostly relating to transport infrastructure. GGS net investments in non-financial assets were funded in full through net cash inflows from operating activities.

RoSF 2021-22, Outcomes Report — Fiscal principles and Capital Purchases, p.3-3, p.3-6, p.3

Non-financial Public Sector borrowings reached $116.252 billion, $9.479 billion higher than the 2022-23 Budget forecast, largely reflecting short-term upward valuations of electricity hedging contracts entered into by energy government-owned corporations before a rise in electricity prices. The impact on NFPS net debt was largely offset by an associated increase in the value of derivative assets, and these positions are expected to reverse as forward contracts unwind.

RoSF 2021-22, Outcomes Report — Overview, p.3-2, p.3

The General Government Sector recorded a $13.93 billion operating surplus, the largest in Queensland's history and a $14.959 billion improvement on the $1.029 billion deficit forecast in the 2022-23 Budget. It follows the previous record $4.284 billion surplus (restated) in 2021-22.

RoSF 2022-23, Outcomes Report — Net Operating Balance, p.3-6, p.3

Revenue grew 21.1 per cent ($15.625 billion) on 2021-22, led by 'other revenue' rising $9.45 billion, predominantly royalties. The increase reflected exceptionally high global coal and oil prices and the introduction of new progressive coal royalty tiers from 1 July 2022. Adjusting for the royalty windfall, underlying revenue growth was 9.7 per cent.

RoSF 2022-23, AASB 1049 Overview — Revenue, p.4-2 to 4-3, p.4

Net debt finished at $2.615 billion versus the $19.772 billion 2022-23 Budget estimate, as stronger royalty revenue reduced borrowing requirements and the government set aside investments for future regional infrastructure. The net debt to revenue ratio was 3 per cent, down from 15 per cent in 2021-22, and net debt declined for a third consecutive year.

RoSF 2022-23, Outcomes Report — Net Debt and Fiscal principles, p.3-2 to 3-6, p.3

Expenses grew 8.6 per cent ($5.978 billion) on 2021-22, well below revenue growth. Employee and superannuation expenses rose 10.2 per cent following certified public sector wage agreements (4 per cent in years one and two) and a 2.7 per cent rise in full-time-equivalent employees, alongside the $175 Cost of Living Rebate and demand-driven service costs.

RoSF 2022-23, AASB 1049 Overview — Expenses, p.4-3 to 4-4, p.4

The State Non-financial Sector capital program delivered in 2022-23 was $17.561 billion, $559 million (3.5 per cent) higher than the 2023-24 Budget estimated actual. General Government purchases of non-financial assets were $9.899 billion, reflecting higher activity in the final quarter.

RoSF 2022-23, Outcomes Report — Fiscal principles and Capital Purchases, p.3-3, p.3-6, p.3

In late June 2023 the Australian Government made advance payments, including $758 million of disaster recovery (DRFA) funding (around 40 per cent of payments budgeted for 2023-24), $620 million of Financial Assistance Grants brought forward in full, and $398 million up-front for the Social Housing Accelerator program. Much of the FAGs were on-passed to local councils, lifting both revenue and expenses.

RoSF 2022-23, Outcomes Report — Revenue, p.3-4, p.3

Royalties and land rents are now estimated to total $13.623B in 2022-23, $5.791B higher than forecast at budget, driven by record global coal prices and high oil prices, and a weaker Australian dollar. Coal royalties alone reach $10.698B (up from $5.480B at budget). The new progressive coal royalty tiers introduced on 1 July 2022 are estimated to generate around $3 billion in 2022-23.

MYFER 2022-23 (Budget Update), Revenue — Royalties, p.17; Table 14 Taxation and royalty revenue, p.39; Box 3, p.20, p.17

A General Government net operating surplus of $5.18B is forecast for 2022-23, a $6.209B improvement on the $1.029B deficit forecast at budget. The Treasurer noted this record surplus may be the high-water mark of the current economic cycle. A small deficit of $458M is now expected in 2023-24 as coal and oil prices normalise, before surpluses return in 2024-25 and 2025-26.

MYFER 2022-23 (Budget Update), Net Operating Balance, p.15; Table 4 Reconciliation, p.15; Foreword, p.2, p.15

General Government net debt is estimated at $14.534B by 30 June 2023, $5.238B lower than projected at budget, mainly from the royalty windfall. The improvement is forecast to persist across the forward estimates, with net debt of $36.778B by 2025-26 (down from $39.214B at budget). The net debt to revenue ratio improved by a further 9 percentage points since the Budget.

MYFER 2022-23 (Budget Update), Balance Sheet, p.24; Government Fiscal Principles, p.25-26, p.24

The Budget Update directs the additional royalty revenue to regional investments, including a $3 billion long-term asset held by the Consolidated Fund dedicated to future regional infrastructure, a $1 billion equity contribution to government-owned corporations for priority regional projects, and funds for coal communities, common user infrastructure, critical minerals and the Resources Community Infrastructure Fund.

MYFER 2022-23 (Budget Update), Overview, p.3; Box 3 Investing Queensland's resources windfall, p.20, p.20

The Non-financial Public Sector capital program over the 4 years to 2025-26 rose to $64.844B, up from $59.126B at budget, with the main contributor being the Queensland Energy and Jobs Plan. The government committed an extra $4 billion over four years to support the plan, including $2.5 billion to increase the Queensland Renewable Energy and Hydrogen Jobs Fund to $4.5 billion.

MYFER 2022-23 (Budget Update), Capital Program, p.24; Box 1 Queensland Energy and Jobs Plan, p.5, p.24

General Government expenses are estimated at $76.047B in 2022-23, $1.132B above the budget estimate. The increase is mainly additional health expenditure, a one-off water bill discount for South East Queensland households, actuarial adjustments to defined benefit superannuation liabilities and costs of new superannuation contribution arrangements for public sector employees. Expenses growth of $6 billion over the forward estimates is contained within a $12.8 billion revenue uplift.

MYFER 2022-23 (Budget Update), Expenses, p.22, p.22

Year-average Brisbane inflation is now forecast at 5.75 per cent in 2022-23, up from 3.75 per cent at budget and the highest rate since 2000-01, before moderating to 2.75 per cent in 2023-24. The annual rate of inflation in Brisbane reached 7.9 per cent in the September quarter 2022.

MYFER 2022-23 (Budget Update), Economic Overview, p.5-6; Table 1, p.6, p.6

Gross State Product growth is now forecast at 2.5 per cent in 2022-23 (down from 2.75 per cent at budget), reflecting rising interest rates and a substantially weaker global outlook, with coal export volumes downgraded. The IMF downgraded global growth, warning 'the worst is yet to come'. Risks to the outlook are clearly on the downside, including a possible global hard landing and the ongoing conflict in Ukraine.

MYFER 2022-23 (Budget Update), Economic Overview, p.5-8; External conditions, p.7; Risks to the outlook, p.13, p.7