Queensland recorded a budget surplus of $3.34 billion last financial year - almost $1 billion more than originally forecast - on the back of better-than-expected investment returns and taxation revenues as well as lower-than-forecast spending.
Treasurer Terry Mackenroth, in a statement to Parliament today, says it is the highest operating surplus in Queensland and the second highest of any state or territory in Australia since accrual accounting was introduced in 1998/99.
This "outstanding result", he says; has been achieved through strong economic management and on the back of a strong, flourishing economy.
Growth in gross state product growth of 3.9%, above the national rate of 3.6%, added an extra $202 million to taxation revenues, including higher-than-anticipated payroll tax and transfer duty collections.
"During the same period general government expenses were $258 million lower than that estimated at the time of Budget. This under-expenditure represents only 1% of budgeted expenditure and primarily relates to the timing of claims under grants and subsidies programs," he says.
"Another factor contributing towards the lower expenditure was the extinguishment of a loan made to the Australian Magnesium Corporation Ltd that did not occur in 2003/04 as expected. This expense of $63 million will now be recognised in 2004/05 in accordance with the date of the signing of the associated documentation."
Additionally, an improvement in market conditions lifted investment returns to 21%, compared with the 18% return forecast in the Budget.
"This contributed an additional $390 million in interest income to our final position," Mackenroth says.
After adjustments are made for superannuation, the state posted a GFS operating surplus of $2.095 billion and a cash surplus of $3.49 billion - up from the estimated actual of $2.249 billion at Budget.
"The government was in fact able to repay debt, that is, reduce general government sector borrowings during 2003/04 while spending $2.415 billion on capital," he says.
"The additional funds delivered through this excellent result have enabled us to undertake our Budget capital program without the borrowings we originally planned. This increased capacity will now be reassessed as we start preparations for the 2005/06 budget and in line with our budget priority of urban and transport infrastructure."
Property Council of Australia Queensland executive director Robert Walker says the result shows Queensland is "the economic powerhouse of Australia".
"We have record surpluses, outstripping the so-called economic capitals of Australia, we have the highest population growth rate and we are attracting a diverse range of industries to the state to underpin our performance," he says.
"Undoubtedly, this result places Queensland in a very strong position into the future. It also places us in a very strong position to undertake some fundamental reforms in the areas of tax and infrastructure.
"Treasury now has the opportunity to review some of the deadweight business taxes, in particular stamp duty and land tax, and look at reducing the burden on business to allow the state to further improve its economic position.
"Because of the sound economic management of this government, Queensland can take a quantum leap and fundamentally reform its tax system to make this state even more attractive to investors.
"We also have the opportunity to use the surplus to deliver infrastructure ahead of time that ensures we can capitalise on our growth and ensure it is sustainable into the future."