The Queensland premier, David Crisafulli, has promised no austerity in his first budget, despite the state facing a forecast $218bn in debt.
Tuesday’s state budget will be the Liberal National party’s first since 2014. Then led by premier Campbell Newman, the LNP lost government in 2015 after slashing tens of thousands of public service positions and proposing the sell-off of public assets to balance the books.
The 2025-26 budget is expected to run a deficit, despite what the government admits is a relatively poor financial position.
Asked how his approach would differ to the last LNP government, Crisafulli said he had chosen not to impose austerity measures.
“My choice is respect for people’s money, not austerity. And you can respect people’s money, and you can still build things, and you can still grow the services that people need,” he said on Monday.
The premier said the budget would look to resolve “structural changes” in service delivery “so structurally in the years to come, this state can grow and grow well”.
“We are fixing the mess we’ve inherited,” Crisafulli said.
The LNP government claims that debt would have peaked under Labor at $218bn in 2027-28. Labor claims it would have hit just $176bn.
Last year’s budget – Labor’s last in government – was packed with cost-of-living relief, much of it funded by borrowing. That included now permanent measures like 50-cent public transport fares, but also a range of “sugar hit” policies such as a $1,000 energy rebate and cheaper car registration.
Queensland’s state government is also midway through a $100bn infrastructure program, some of it a result of the 2032 Brisbane Olympics.
In January the treasurer, David Janetzki, conceded a fiscal downgrade was virtually guaranteed for the state, “with debt per capita tracking to be the worst in the country”.
He said the fiscal trouble was due to an enormous increase in infrastructure costs – which he blamed on his Labor predecessors – and a decline in coal revenue, expected to drop by more than half.
Janetzki said the budget would “lay the foundation for that long-term budget repair”.
“As a government, we have been very calm and methodical about how we’ve undertaken the budget process,” Janetzki said on Monday.
The 2025-26 budget will include $147.9m in funding for extra police equipment. It will also include a $33bn investment in the public health system, the ABC has reported.
It comes as the government is locked in enterprise bargaining with the Queensland Nurses and Midwives’ Union and is expected to face protests on Tuesday from the Queensland Teachers’ Union. Both are furious at pay offers they say break a promise for nation-leading wages.
The opposition leader, Steven Miles, has accused the government of halting Labor’s hospital expansion program and cancelling projects.
“They promised this magic pudding where they could somehow lower taxes, increase spending but have lower debt. That was always based on a lie … [On Tuesday] we get to see which of their promises they’ve decided to break,” Miles said.
Labor has long accused the government of planning to cut infrastructure projects and cost-of-living measures. On Monday Miles said the government had been worse than Campbell Newman’s.
S&P Global Ratings confirmed Queensland’s AA+ credit rating last September. In February it revised its outlook after a midyear fiscal update by the new government, warning “debt may rise rapidly”.
It predicted that “several projects may be cancelled, deferred or changed in scope to reduce the state’s infrastructure spending over the next three years”, which would lower overall infrastructure spending, pointing to a decision to slash a huge hydroelectric project, once billed as the world’s largest.
“Queensland’s debt levels will increase to fund spending pressures. We forecast total tax-supported debt will rise to more than 150% of operating revenue in fiscal 2027 from 100% in fiscal 2023,” it said.
The agency reaffirmed its AA+ long-term credit rating, noting the state’s “exceptional liquidity and wealthy economy”.
