The Queensland budget took a massive hit to its revenue streams this year as a result of the coronavirus pandemic.
GST was the hardest hit, as people went into lock-down and spent their cash on non-GST items while businesses closed, although it could deliver green shoots to the economy next year.
The money reaped from coal royalties has also suffered as the volume of Queensland’s coal exports fell 3.1 per cent in 2019-20 driven by a COVID-19-induced decline in demand.
Weakness in demand caused benchmark spot prices for hard coking coal and thermal coal to fall 24.5 per cent and 33.4 per cent from the beginning of the year to lows in August and September.
Reduced demand, the impacts of COVID-19 and uncertainty surrounding Australian access to the Chinese market are expected to lead to Queensland’s coal exports falling 8 per cent in 2020-21 before recovering.
This all has an impact on the royalties Queensland reaps from coal mining.
People lost their jobs as businesses were forced to shut and social distancing became the norm.
But as of last month, Queensland was the only state where employment and hours worked had rebounded to above their pre-COVID-19 levels.
The Queensland budget papers explain the state’s labour market recovered following the easing of restrictions due to success in containing the virus.
The Sunshine State will become a new home for thousands of southerners who will move to Queensland in the coming years.
Treasurer Cameron Dick said COVID-19 shut down international migration but Queensland would continue to be the “destination of choice” for interstate migration.
About 86,000 people will move from other states to Queensland between 2020-21 to 2023-24.
“That means over 88 per cent of all net domestic migration gains in that time will be in Queensland,” Mr Dick said.
Revenue took a hammering and so did Queensland’s projections of surpluses, which have been wiped out over the next few years.
A $234 million surplus expected for this financial year, predicted just one year ago, has been turned into an $8.63 billion deficit, with deficits also predicted over the next four years.