The state’s financial performance was significantly impacted by COVID-19
COVID-19 and the resulting domestic and global economic downturn substantially affected the state’s main revenue streams in 2019–20, including from goods and services tax (GST) grants, taxation, the provision of government services, and royalties (mainly from the extraction of coal).
The substantial downturn in economic activity from COVID-19 significantly reduced total GST collections by the Australian Government, which reduced the amount of GST it paid to the states and territories as GST grants. The Queensland Government received $1.6 billion (11 per cent) less GST funding this year. This decline is expected to continue in 2020–21 as the ongoing impacts of COVID-19 continue.
The Queensland Government’s expenses increased significantly because it introduced economic relief packages in response to COVID-19. In addition, the growing public sector workforce, particularly in health and education, also contributed to the increasing expenses.
The Queensland Budget 2020–21 recognises there will be difficulties in increasing revenue over the next four years. The budget also forecasts that expenses will increase over the same period as the government continues to respond to COVID-19 and implement plans for economic recovery. The government is aiming to limit the expenses of the general government sector (government departments and other non-trading entities) through a savings and debt plan, targeting savings of $3 billion over four years to 2023–24.