Balance sheet
Box 4: Net debt
Net debt is a key metric for examining the soundness of a government’s fiscal position. The net debt measure is the preferred metric for governments, including the Australian Government. Queensland’s disciplined fiscal strategy is establishing the path to stabilising its net debt burden and returning to operating surpluses.
Net debt forecasts for 2023–24 have improved from $39.2 billion in the 2021–22 Budget to $16.2 billion in the 2023–24 Budget. Further improvement is forecast in the 2023–24 Budget Update with net debt dropping to $14.7 billion (Chart 9).
Chart 9: Net debt for 2023–24
Queensland’s General Government net debt relative to revenue compares favourably to New South Wales and Victoria (Chart 10). For example, Queensland’s net debt ratio of 54 per cent in 2026–27 compares to
93 per cent in New South Wales and 172 per cent in Victoria.
Chart 10: Net debt to revenue of major states1, 2
1. Source: Budget Paper No. 1 – Budget Statement – Budget 2023–24 (nsw.gov.au)
2. Source: Victoria 2023–24 State Budget – Strategy and Outlook (vic.gov.au)
General Government Sector Debt
Net debt is expected to reach $14.676 billion by 30 June 2024, which is $1.514 billion lower than anticipated at the 2023–24 Queensland Budget. The improvement in net debt arises mainly from the improved operating cash flows in 2022–23 which lowered net debt rolling forward from the 2022–23 outcome.
General Government Sector borrowing is estimated to be $63.373 billion by 30 June 2024, which is $2.1 billion lower than projected in the Budget.
Borrowings are expected to increase over the forward estimates to fund the state’s large and transformative capital program. This will also see net debt rise over time.
Significant equity funding is being provided from the General Government Sector to the Public Non-financial Corporations Sector, primarily for the Queensland Energy and Jobs Plan and water infrastructure as projects come online.
Public Non–financial Corporations Sector Debt
Public Non-financial Corporations (PNFC) Sector debt is primarily held by government–owned operations and is supported by income–generating assets including key pieces of economic infrastructure.
Borrowing with Queensland Treasury Corporation (QTC) of $44.316 billion is projected for 30 June 2024 in the PNFC Sector, $1.353 billion higher than the 2023–24 Budget, largely due to the timing of capital purchases.
Along with leases and other similar arrangements of $687 million and securities and derivatives of $1.526 billion (impacted by electricity prices), total PNFC Sector borrowing is expected to be $46.528 billion by 30 June 2024.
Borrowing with QTC will also fund the projected capital spending of government–owned corporations for the Queensland Energy and Jobs Plan.
Capital Program
The Non-financial Public Sector (NFPS) capital program for the period 2023–24 to 2026–27 is $96.220 billion. The capital program comprises $82.516 billion of purchases of non-financial assets (PNFA), $11.475 billion of capital grant expenses, and acquisitions of non-financial assets under finance leases and similar arrangements of $2.229 billion.
Changes to the NFPS capital program since the 2023–24 Budget include a provision for replacing the existing bus fleet with Zero Emission Buses, acceleration of the Queensland Train Manufacturing Program and delivery of the Australian Government funded Housing Acceleration Program. The roll out of the Queensland Energy and Jobs Plan continues, with $19 billion of renewable energy projects budgeted over the forward estimates.
The impact of the Australian Government’s Infrastructure Investment Program review continues to be assessed. It is expected that the outcome will, in the medium term, significantly reduce the Australian Government’s share of funding for Queensland’s future transport infrastructure. Indications are the Australian Government will move from funding 80 per cent of regional transport infrastructure to a 50:50 funding basis with the state.
