Queensland Economic and Fiscal Update IAG 2016 Annual Conference

Transcription

1 Queensland Economic and Fiscal Update IAG 2016 Annual Conference Mary-Anne Curtis, Deputy Under Treasurer, Agency Performance, Queensland Treasury 1

2 Queensland s economic outlook Strongest economic growth in Australia this year and coming years Economic growth at 4% in and 3½% in Growth led by diversified export portfolio, incl. LNG ramp-up Growth to be more broad-based, as LNG production plateaus, and domestic activity strengthens Over Forward Estimates, employment growth strengthens to 1¾%, unemployment rate falling to 5¾% 2

3 Queensland is a relatively diversified economy 100% Industry composition, Agriculture 80% 60% 40% 20% 0% NSW VIC QLD WA AUST Natural resources Manufacturing Public sector and utilities Construction Wholesale and retail trade Other Transport and communications Finance and property services Education and training Health care and social assistance 1. CVM, reference year. Industry gross value added. Source: ABS

4 Queensland is forecast to be the fastest growing state Economic growth by state 1 5 NSW Vic. Qld WA SA Tas. annual % change CVM, reference year are estimates; onwards are forecasts. Source: Queensland Treasury and various state budgets. 4

5 Queensland s comparative advantages Our people Proximity to growing trading partners Resource endowments Natural environment Diversified economy Research and development 5

6 Budget outlook 6

7 Budget focus - Advancing Queensland s Economy Growing Innovation Attracting Investment Building Infrastructure Creating Jobs 7

8 Market-led proposals $450 million Logan Motorway enhancement 1300 potential jobs $100 million $100 million Queensland Aquarium and Maritime Museum Brisbane International Cruise Terminal 300 potential jobs 8

9 Fiscal principles The Government will target ongoing reductions in Queensland's relative debt burden, as measured by the General Government debt-to-revenue ratio. The Government will target a net operating surplus that ensures any new capital investment is funded primarily through recurrent revenues rather than borrowing. The General Government capital program will be managed to ensure a consistent flow of works to support jobs and the economy and reduce the risk of backlogs emerging. Maintain competitive taxation by ensuring that General Government sector own-source revenue remains at or below 8.5% of nominal gross state product, on average, over the forward estimates. Target full funding of long-term liabilities such as superannuation and WorkCover Queensland (WorkCover) in accordance with actuarial advice. Maintain a sustainable public service by ensuring overall growth in full-time equivalent employees does not exceed population growth from

10 Fiscal principle - falling debt-to-revenue ratio General Government debt-to-revenue ratio Continued improvement in State s fiscal sustainability. Debt to revenue ratio declining significantly over the forward estimates. Expected to reach 68% in compared to 87% in

11 Reduction in General Government debt Budget Budget Budget $12.3B lower $10.4B lower $10.4B lower 46 $ billions

12 Fiscal principle - forecast surpluses estimated surplus of $152 million Net Operating Position For Budget forecast surplus of $867 million largest surplus for a decade. Surpluses forecast in each of the next 4 years $3.2 billion $1.1b disaster relief withheld by Federal Government Lower Federal Government funding

13 Fiscal principle - funding of new capital investments Net operating cash flow as a proportion of purchases of non-financial assets estimated actual coverage now expected to be 115% (compared to Mid Year estimate of 82%). Purchases of non-financial assets funded from net operating cash flows averages 75% across period to

14 Fiscal principle competitive taxation 14

15 Fiscal principle long-term liabilities Debt Action Plan Defined Benefit Scheme $2b $4b repatriation State Infrastructure Fund $10b surplus $6b remaining surplus $2b Debt reduction All payouts guaranteed by legislation Current fund $34b 100% Fully funded $24b 100% Fully funded $24b Only fully funded scheme in Australia Scheme funding as at 30 June

16 Fiscal principle FTE growth 240,000 Actual FTEs Estimated FTEs FTEs in line with population 220, , , , , , ,

17 Questions? 17