State Treasurer Andrew Fraser said the final deficit for this financial year was forecast to be $574 million, below the $1.57 billion prediction made back in February.
But he said the new budget would have a $1.954 billion negative operating balance in the 2009-10 financial year.
“A $15 billion loss in taxes, royalties and GST over four years has directly impacted on our bottom line, wiping out planned surpluses,” he said.
“This includes a further $1 billion which has been wiped off the forecast for royalties across the forward estimates with the setting of coal prices in recent months.”
The Queensland Resources Council has seen encouraging signs in the budget, with QRC chief executive Michael Roche saying the state’s minerals and energy producers returned almost $3.4 billion in royalties to taxpayers for this financial year despite the global downturn.
“While royalties are projected to be around $1.8 billion in 2009-10, it’s worth noting that this figure is also the state’s second-highest on record, and it will be achieved without the benefit of the record prices for coal that were a hallmark of 2008,” he said.
QRC has welcomed various measures in the budget, including the “streamlining” of resources exploration and development approval processes and an extra $1.2 million per annum to enhance Environment Impact Statement assessments.
The budget has also identified cost savings in the proposed Northern Missing Link coal rail project, expected to enter the design and construction phase next year.
Through industry underwriting, Queensland Rail will also spend a total of $862 million on coal network track works as well as new and upgraded rail stock.
QRC is now anticipating the coal industry consortium behind the Wiggins Island Coal Terminal project at Gladstone to reach a financial close by mid-2010.
The state government has also allocated a total of $19 million to its mining sector with $11.97 million to assist exploration grants under the Smart Mining – Future Prosperity program.
Mines and Energy Minister Stephen Robertson said the program provided grants to reduce mineral and energy explorers’ risks, costs and timeframes to bolster the development of mines and gas fields.
As uncertainty over the federal government’s Carbon Pollution Reduction Scheme remains, Queensland will chip in $3.86 million to identify and evaluate sites for long-term underground storage of carbon dioxide.
Another $4 million will go to the completion of a new drill core storage facility in Mount Isa.
In making its budget the Queensland Treasury has forecast growth of 0.5% in the current financial year while 2009-10 is expected to have growth of 0.25%.
Unemployment is forecast to reach 7.25% in 2010-11.
Under infrastructure spending, $7.3 billion will go to transport and roads projects, $3.2 billion is slated for the state’s electricity assets, $1.296 billion is part of a health capital works program, $1.84 billion is for projects in the education sector, and $1.122 billion is for water projects.
Reported by Dow Jones Newswires a Standard & Poors credit analyst said an upgrade in the state’s rating to AAA would require more clarity on the timing of its proposed asset sales and confidence it can improve its financial operating position.
Asset sales flagged by the government include Queensland Rail’s coal haulage business and the Abbot Point Coal Terminal.
As part of its cost-cutting, the Queensland government has removed its fuel subsidy.
Australian government funding for the state will increase 9% to $18.307 billion in the next financial year under its previously announced federal programs.