Treasurer David Janetzki has handed down his first mid-year budget update on Thursday, revealing a contrary outlook to that delivered in June's budget under the former Labor government.
The state's four-year capital program is projected to increase by $22.6 billion to a total of $129.9 billion on projects including health capacity expansions, road and transport projects, dams and energy, Olympic Games infrastructure and the high-voltage transmission line CopperString 2032 in Queensland's north.
Debt is also set to increase across the four-year forwards, forecast to be $46 billion higher than the June budget with a $4.9 billion revised forecast deficit for 2024/25, an operating deficit of $6.9 billion for 2025/26 and deficits of $9.2 billion in the two years after.
Surplus predictions by the former Labor government in the final two years of forward estimates have been scrapped in the mid-year budget review.
Olympic Games infrastructure is among the big-ticket items plunging budget forecasts into deficit. (Joel Carrett/AAP PHOTOS)
Total revenue from royalties in 2024/25 was $4.7 billion, a 37.5 per cent decrease on 2023/24 and a $420 million dip from June's forecast.
The fall was driven by lower-than-anticipated coal export volumes and a faster-than-expected decline in hard coking coal price, offset by a weaker Australian dollar.
Government borrowings that were earlier forecast to be $172 billion in June for the 2027/28 financial year are now expected to rise to $217.8 billion.
Non-financial public sector borrowings per capita in Queensland are set to pass NSW through 2025 then Victoria in 2027/28.
Prior to the state election in October, Mr Janetzki said he would target operational surpluses but now he says that is exceptionally difficult.
"I always want to target an operating surplus, but now that we know the true extent of the deterioration of the books, that will be a serious challenge," he told reporters on Thursday.
The government says the Cross River Rail project will cost three times its original price tag. (Darren England/AAP PHOTOS)
After winning government, the Liberal National treasurer says he has found a shopping list of expenditure overruns and blow-outs putting pressure on the bottom line.
The LNP claims the construction cost of the athletes' village for the 2032 Olympics is set to balloon to $3.5 billion.
Queensland Hydro revealed the Sunshine Coast's Borumba Pumped Hydro project had blown out by $4 billion to a total of $18 billion.
The government also claimed the centrepiece Cross River Rail project connecting Brisbane will cost at least $17 billion when it was originally slated to have a $5.4 billion price tag.
Mr Janetzki flagged before the mid-year budget review that there could be a credit rating downgrade from S&P's 15-year-long AA+, but now he believes it is a certainty.
"Knowing what we know now, with debt per capita tracking to be the worst in the country, it is highly likely that we will not just have an outlook downgrade, but that it's highly likely we will have a rating downgrade too," he said.
Despite the financial pressures on the government's coffers, the treasurer maintained Queenslanders will not lose essential services.
"Service delivery is paramount to our government, and we are determined to make sure that Queensland receives more and better services," he said.
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