Economic Outlook
Queensland’s economic growth is forecast to strengthen in the short-term and then remain robust across the forward estimates.
Gross State Product (GSP) growth is forecast to strengthen to 2½ per cent in 2024–25 despite the impacts of natural disasters in early 2025 and the initial effects of changes in global trade policies, being estimated to have reduced growth by around ¾ of a percentage point.
Public demand is expected to remain robust and private sector consumption and investment are forecast to strengthen to be key drivers of activity next year. The Budget is forecasting GSP growth of 2¾ per cent in 2025–26, before easing slightly while remaining robust at 2½ per cent from 2026–27.
Queensland’s labour market conditions are expected to remain strong, with employment growth of 3 per cent in 2024–25, before jobs growth stabilises at 1½ per cent from 2025–26 onwards, broadly in line with population growth.
The State’s unemployment rate is forecast to remain lower for longer than previously expected. While edging slightly higher from 4 per cent in 2024–25 to 4¾ per cent in 2028–29, it will remain well below the long-run average across the forecast period.
Wages growth is forecast to be 3¾ per cent in 2024–25 and 3½ per cent in 2025–26 before slowing to 3 per cent by 2028–29, delivering ongoing real wages growth across the forward estimates.
Respecting Queenslanders’ Money – Fiscal Outlook
This Budget is about setting the Foundation for a Fresh Start for Queensland following the youth crime, health, housing and cost of living crises.
This Budget secures the infrastructure, programs and services critical to delivering a fresh start for Queensland’s future, with responsible economic management.
This Budget identifies a clear pathway from the history of unsustainable cost overruns and mismanagement back to credible and responsible economic management over the forward years. The deficit in this Budget is an important step in Budget repair, sustainably securing the delivery of programs and services needed for a fresh start, while also ensuring debt remains lower than under the Budget the Government inherited.
While the Government could have chosen in this Budget to expedite the path to Budget surplus, it would have come at a cost to Queenslanders, a path the Government was unwilling to take. This Budget includes ongoing and sustainable commitments to core services across community safety, health, housing, infrastructure, education and cost of living.
The Government’s principles for respecting Queenslanders’ money will support an improved fiscal outlook with borrowings moderating, expenses growth below revenue growth and steady improvement in net cash flows to fund the Government’s capital program.
The 2025–26 capital program sets the foundation for a fresh start with the generational infrastructure needed for our growing State. The decision of the Government to pause BPIC and commence a review of the construction industry under the Queensland Productivity Commission addresses cost overruns identified in the 2024–25 MYFER under the former Government.
The capital program also focuses on key Queensland investment priorities including delivery of the Hospital Rescue Plan, the 2032 Delivery Plan, the Residential Activation Fund and a pipeline of social and community housing. The capital program is expected to total $116.8 billion over four years to 2028–29.
Responsible economic management and commitment to a safe and secure pathway to budget improvement will drive the Non-financial Public Sector’s (NFPS) borrowings lower compared to forecast in the 2024–25 MYFER. NFPS debt is forecast to be $147.8 billion as at 30 June 2026, almost $8.4 billion lower than forecast in the 2024–25 MYFER. In 2027–28, NFPS debt of $190.4 billion will be $27.5 billion lower than it would have been under the former Government.
The 2025–26 Budget is an important step towards restoring respect for Queenslanders’ money while also delivering the foundation of a fresh start for Queensland. Key 2025–26 Budget aggregates show measurable improvement when compared to the 2024–25 MYFER, that is expected to continue over the medium term.
Key Fiscal Aggregates
| General Government Sector | 2023–24 Outcome $ million | 2024–25 MYFER $ million | 2024–25 Est. Act. $ million | 2025–26 Budget $ million | 2026–27 Projected $ million | 2027–28 Projected $ million | 2028–29 Projected $ million |
|---|---|---|---|---|---|---|---|
| Revenue | 89,768 | 88,071 | 89,476 | 91,337 | 94,886 | 97,748 | 102,457 |
| Expenses | 88,087 | 92,983 | 94,852 | 99,918 | 100,751 | 102,033 | 103,543 |
| Net operating balance | 1,681 | (4,911) | (5,376) | (8,581) | (5,864) | (4,285) | (1,086) |
| Borrowings | 58,773 | 77,627 | 74,843 | 95,480 | 114,301 | 131,696 | 145,176 |
| Net debt | 5,684 | 25,539 | 22,092 | 41,803 | 61,605 | 79,239 | 93,217 |
| Non-financial Public Sector | |||||||
| Borrowings | 106,397 | 128,085 | 124,118 | 147,840 | 170,484 | 190,360 | 205,660 |