Trad’s big problem to rule them all
SIX months ago, after Treasurer Jackie Trad handed down the State Budget, I quipped about how it might be prudent to have the car packed and ready for a quick exit from Queensland.
Beneath all the glossy guff about all the good work the Labor Government was doing, the numbers told a different story.
They showed an administration still living beyond its means with bolted on expenses being paid for by temporary revenue spikes and tax hikes.
In coming days Trad will hand down the Mid-Year Fiscal and Economic Review, and nothing that has happened since the Budget suggests it's now OK to unpack the car.
Coal has come to the administration's rescue on a couple of occasions now, but the resources cash cow appears to be running low on milk.
The wafer-thin operating surplus of $190 million that was forecast was predicated on coal prices remaining high despite market warnings repeated in Budget papers about the potential impact from the US-China trade war.
Last week the thermal coal price fell to $US64.67 and the coking coal price rose to $US135.56, both well below Treasury's forecasts.
These are spot prices while much of the industry operates on long-term contracts.
And a falling Australian dollar will offset some of the decline.
But industry experts are predicting the difference between forecasts and current realities could blow a hole in the State Budget that's worth hundreds of millions of dollars.
The Government has already raised taxes on the racing industry, foreign property buyers, large landholders, gas producers and big business through a payroll tax hike along with introducing a waste levy that will impact almost everyone.
Cutting spending would impact public service jobs and Labor is not going to do that less than a year from the next election.
So where do they turn to next? Maybe a toll on people leaving town.