The most important word in Trad’s Budget

OPINION

JACKIE Trad's second Budget is squarely aimed at cauterising the political problem that Labor has in regional Queensland.

It was no accident that the Treasurer mentioned the word "region" in one form or another 37 times in her budget speech.

"Today," Trad began "I deliver a Queensland Budget unashamedly focussed on our regions."

However, the Palaszczuk Government's cure-all for regional Queensland will be seen as being more about applying band-aids to problems than it will be about performing life-saving surgery.

As Trad pointed out in her speech, $29 billion, or some 70 per cent of the Government's infrastructure spend, has been committed to projects outside greater Brisbane since it came to office in 2015.

However, regional Queensland is still of the view that its not getting a fair share because there's no consensus on what a fair amount should be.

And there never will be.

Regional issues, such as the Adani Carmichael mine project, are part of the reason Labor is struggling outside Queensland’s southeast. Picture: Cameron Laird
Regional issues, such as the Adani Carmichael mine project, are part of the reason Labor is struggling outside Queensland’s southeast. Picture: Cameron Laird

What will make this political quandary even more complex is that the Queensland economy is hitting a period of restrained revenue growth.

Windfall revenues, particularly from coal and gas royalties and dividends, have kept the Government's capital spend afloat for the last few years while it blew billions of dollars on employee expenses.

However, forecast revenue growth over the next two years before the state election will be well below what the Government has previously been able to bank on.

This has forced the Government to borrow more to keep its infrastructure spend going with total debt due to hit $88 billion in 2021-22 instead of the $83 billion that was forecast last year.

But even this growth in borrowings is restrained because the Government simply can't afford to risk a blowout of its debt-to-revenue ratio as this could lead to the politically toxic outcome of a credit rating downgrade.

That's why despite planning to borrow almost $3 billion more in the general government sector before the election, investment in infrastructure has actually had to be cut $1.1 billion as other commitments suck up what's available to spend.

The Government can talk about the regions all it wants.

But being unable to start building infrastructure beyond what's around underway and announced is a scenario that will convince regional Queensland that, once again, its not getting its fair share.