Queensland is forecast to record back-to-back deficits over the next two years, in what the state government says is a deliberate move to support those struggling with the cost of living.
The upcoming state budget will detail an expected $3 billion deficit for the 2024-25 financial year, before reducing to a deficit of less than $1 billion the following year.
It's a stark difference from the $122 million surplus previously forecasted, followed by an expected $91 million surplus the following year.
Queensland Treasurer Cameron Dick blames record spending on health and housing as reasons for the deficit, along with yet-to-be-announced cost-of-living relief.
He stressed the figures were subject to change.
"If our budget has to go into deficit to keep your household budget in surplus, then that is what we will do," Mr Dick told state parliament on Tuesday.
"These are deliberate choices that all political parties must make, whether to prioritise people or numbers on a balance sheet."
Shadow Treasurer David Janetzki told the House the government was "more concerned with how things look, rather than how things actually are".
"Never has a Queensland Government spent more, borrowed more, or taxed more and left Queenslanders with less to show for it," he said.
But economists say the forecasted deficit could be due to three reasons.
Conservative coal assumptions
Independent economist Saul Eslake says governments often make conservative assumptions about coal prices.
"It's because [governments] learnt the hard way, it's better to under promise and over deliver rather than the other way around," Mr Eslake said.
"Effectively the government is taking out insurance in spending money it doesn't have," he said.
Coal prices rose substantially in the aftermath of Russian President Vladimir Putin's invasion of Ukraine when production was predicted to be impacted from sanctions imposed by Western governments.
"Coal prices are still somewhat higher than the lead up to the invasion," Mr Eslake said.
"That means that Queensland is generating more revenue in mining royalties than what was expected."
But Mr Eslake says that with the combination of China's slowing economy and the world looking towards renewable energy there is the expectation that global coal prices will fall.
"Therefore governments who are dependent on commodity revenue these days err on the side of caution," he said.
Coal royalties generated an additional $8.6 billion in revenue for Queensland in this and last financial year.
That's expected to moderate significantly to an average of $280 million per annum in the three years to the 2026-27 financial year.
Revisions of GST revenue
The second factor in influencing the deficit according to economists would be the state's share in GST revenue, which has been advised down.
According to the Commonwealth Grants Commission, which provides annual revisions, Queensland's GST distributions are estimated to fall for 2024-25.
This is due to an increase in Queensland's relative revenue raising capacity.
"In recent years the state's revenue has been substantially enhanced by the high level of coal prices from the invasion of Ukraine," said Mr Eslake.
"So Queensland, like New South Wales, might be getting less revenue from GST for the next few years".
Cost-of-living spending
The final influencing factor, economists say, will likely be due to the Queensland government's cost-of-living relief package.
"While I have no problem with a state government or federal government providing cost-of-living pressures for people who generally need it," Mr Eslake said.
"An un-targeted cash splash carries risk of fuelling inflationary pressure."
The Queensland government last month announced a rebate taking $1000 off electricity bills from July 1.
"With an eye to an election that's only a few months down the road, there are concerns" Mr Eslake said.
Mr Dick told the ABC modelling from Queensland's treasury on Brisbane's CPI showed the electricity rebates could be used to reduce inflation by about another one per cent.
Why does a deficit matter?
Joe Branigan from Tulipwood Economics says a deficit means there could be less money available to spend on government frontline services, like teachers.
"The higher the budget deficit, the higher the interest payments," Mr Branigan said.
"Deficits force the government to prioritise spending and keep to a budget constraint."
To explain priority spending, Mr Branigan used the analogy of whether a person could go to the Taylor Swift and Beyonce concerts or whether they lived within the constraints of a budget.
A fan would need to pick their more desired concert to go to and forego the other.
"Effectively this is what the budget process should be doing, which is ranking spending priorities," Mr Branigan said.
The exact picture of where taxpayers' money is being spent will become clearer when Queensland’s budget is handed down on June 11.