Queensland will face up to $22bn in additional spending over the next five years as Jim Chalmers shifts costs from the federal budget to the states in what has been labelled “a threat to the federation’s stability”.
New modelling undertaken by Queensland Treasury has found the cumulative costs of the Albanese government’s funding reforms will cost the state between $12.7bn and $22.1bn by the end of the 2030-31 financial year.
Reforms to the NDIS are expected to be the biggest cost impost on the budget, with an estimated impact of $3bn to $10.1bn. This is despite Queensland being the only state yet to sign on to the Thriving Kids program, which is slated to begin receiving federal funding on Thursday.
The country’s most natural-disaster-prone state is also bracing for a $2.5bn to $3.6bn hit to recovery efforts from changed funding splits, while keeping healthy patients stranded in state-run public hospitals due to a lack of aged-care beds will cost $5.9bn
Other areas of cost-shifting, including changes to the healthcare rebate for older Australians and reduced transport funding, could cost as much as $2.6bn.
Speaking at a National Press Club event in Brisbane on Wednesday, Mr Janetzki will accuse the Labor government of heaping too much pressure on the states and territories to make Canberra’s own budget appear better.
“The cost-shifting of long-held federal responsibilities or agreements from Canberra to the states is problematic – and must be called out,” he will say. “Some of it is subtle – some of it is not.
“Nevertheless, it’s a threat to the stability of the federation.
“Queensland Treasury has mapped the scope and magnitude of this cost-shifting over the next five years.
“It made me sit up – and I know all state treasurers recognise the same – some with larger budgets than $100bn, some smaller.
“These were not decisions of the Queensland government, and we have had no say in them.”
The modelling on funding shifts follows Queensland’s credit rating being reduced from AA+ to AA stable by S&P this month due to the state’s historically large building program for transport, energy, hospital and Olympic projects while running cash operating deficits. It is estimated the change could cost $1bn from state coffers in increased debt repayments.
On Tuesday, Moody’s affirmed the Queensland Treasury Corporation’s Aa1-backed senior unsecured rating, stable outlook and aa3 baseline credit assessment, citing its “large, diversified and high-income economy”, broad revenue base, strong liquidity and fully funded pension liabilities.
“When we first came to office, we warned a downgrade was inevitable,” Mr Janetzki said.
“After a decade of fiscal vandalism from the former Labor government, and recent taxation changes and cost-shifting out of Canberra, we remain focused on delivering the services and infrastructure that Queenslanders need.”
Queensland’s budget position faces additional pressure from a $1bn hit to stamp duties after a slump in property market sentiment, driven by interest rate rises and federal tax changes that flowed through to lower sales.
The state’s share of the Commonwealth’s GST carve-out has also continued to shrink over the past three years, with the state last year recording the largest distribution of funding away from any jurisdiction in the tax’s history, at $2.1bn.
While the pool of funds has grown 80 per cent over the past decade, Queensland’s share has grown 39 per cent, while NSW has grown by two-thirds, and more than doubled in Victoria (up 116 per cent) and Western Australia (up 397 per cent).
Read related topics:Anthony AlbaneseFederal Budget