Qld Govt flags two-year Budget deficit
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Treasurer Andrew Fraser has told Parliament the Qld Govt has a plan to get out of the red. (ABC News: Matt Wordsworth)
The Queensland Government says the next two State Budgets are expected to be in deficit.
The 2008 financial year ended in the red, but a surplus was predicted for 2008-2009.
However, next week's mid-year economic review will show a reduction in net state taxes and royalties of $3 billion, as well as a drop in GST revenue of $1.3 billion over the next few years.
Queensland Treasurer Andrew Fraser has told Parliament that the State Government has a plan to get out of the red.
"Next year will be the toughest for generations and we need to set the course now," he said.
"This necessitates a Budget deficit and likely in the year after also.
"It will also provide however, Mr Speaker, a pathway out of deficit as we repair our position for the future."
Nevertheless, Mr Fraser has told Parliament the Government will maintain services and infrastructure.
Premier Anna Bligh says deficits are sometimes needed, in order to keep building.
Ms Bligh has told Parliament that it is important to keep spending to maintain economic growth.
"We are going to keep the motor running, we are going to keep Queenslanders in jobs and we are going to keep building Queensland," she said.
"What we know from those opposite now, Mr Speaker, is they'll cut something - what will you cut, what will you cut?"
Queensland Opposition Leader Lawrence Springborg has seized on the deficit prediction.
"Premier [Anna Bligh], your own charter of social and fiscal responsibility says that borrowing will only be undertaken where interest can be paid from the operating surplus," he said.
"Given your admission that the Budget will be in deficit for at least the next two years, you are now in breach of your own charter."
Opposition spokesman Tim Nicholls says the Government has surrendered.
"If Labor can't manage during 10 years of boom times, why should Queenslanders trust you during the tough times of deficit," he said.
The State Opposition has vowed never to take Queensland into deficit.
Mr Nicholls says a LNP government would review services and projects to make sure the Budget always stays in the black.
"We will not be delivering a deficit," he said.
"It has been the practice and the record of Coalition parties not to deliver deficit budgets.
"We'll be cutting our cloth to suit the times that we find ourselves in and if that means there is reduced revenue, we'll be making savings where they can be made."
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