Queensland’s treasury delivers mixed financial news as the state’s mid-year fiscal review exposes growing budget pressures beneath surface improvements. The Crisafulli Government’s first major financial assessment shows disciplined spending management alongside persistent deficit challenges that continue to plague state finances. Despite stronger revenue streams from property markets and labour growth, underlying fiscal problems remain entrenched across multiple budget categories and forward projections throughout the state.
Mid-year review reveals a small increase in deficit
The case of Queensland Finance clearly highlights that modern state financial management is a complex process, with different pressures working in opposite directions, resulting in mixed outcomes depending on the fiscal indicator in question. The state’s finances are also gradually improving. The state’s total borrowings are now estimated to be $146.9 billion as of June 2026, which is $910 million lower than what was originally budgeted in the annual budget. This was announced by Treasurer David Janetzki.
The strength in the property market and favorable labor conditions have created new streams of revenue that cushion spending pressures arising from enterprise bargaining agreements and natural disaster response efforts in various government departments. The revised forecast operating deficit for this year is $8.968 billion, which is a slight increase from the $8.581 billion deficit estimated in June, indicating that structural problems continue despite revenue gains from diverse sources such as mining royalties and GST distributions.
Outcomes of enterprise bargaining shape spending trends
Further funding requirements related to enterprise bargaining outcomes that have been reached since the initial budget have also contributed to increased expenditure, which reflects the government’s commitment to securing competitive public sector employment conditions in light of fiscal constraints. These agreements ensure that Queensland has access to qualified staff in essential services.
Revenue gains tempered by spending pressures
Revenue to Queensland is boosted by the unexpectedly strong performance of key economic indicators, with property markets and employment growth contributing significantly to additional revenue beyond initial treasury forecasts. Factors such as the performance of the property sector and the labor market, along with small increases in national GST payments, result in a net $1.053 billion increase in key state revenues.
The 0.2 per cent expenses growth in 2025-26 is indicated to be the smallest Budget-to-MYFER change since the pandemic, reflecting better fiscal management than in the past. Minister Ros Bates explained the differences in their financial spending, which previously averaged an increase of 2.5 percent compared to the current 0.2 percent.
Disaster relief payments and spending related to the NDIS are further sources of budget pressure that go beyond normal operating needs, and which continue to reflect the challenges being faced by state administrations in coping with unforeseen spending pressures. The non-policy sources of budget pressure must be carefully managed to avoid further weakening of the financial position of the state while adhering to service delivery standards.
Financial key metrics:
- Operating deficit: $8.968 billion (increased from $8.581 billion)
- Debt reduction: $910 million below projection
- Revenue increase: $1.053 billion in forwards
- Expense growth: 0.2% (lowest since the pandemic)
The government has a disciplined approach to fiscal repair
In the financial plan adopted by the government of Queensland, there is an emphasis on a progressive improvement approach rather than a drastic cut in expenditure, which can potentially impact the required growth in the relevant economic sectors. The financial plan of the government of Queensland aims to achieve a balance between the required expenditures and financial sustainability goals in a manner that a drastic change can potentially damage the growth process.
Moreover, further bottom-line improvements have been achieved in the forward estimates, with a smaller deficit estimate of $1.048 billion in 2028-29, which shows positive trends in ensuring fiscal sustainability and efficient financial management. The economic development and focus on productivity enhancement of the economic policies adopted by the Queensland government are showing some positive results, as Queensland has demonstrated the highest growth in Gross State Product in Australia compared to other states.
