Debt is set to reach record levels for a state government planning an Olympics following a milestone budget.
Queensland's Liberal National government on Tuesday handed down its first budget since 2014, hailing its efforts to reduce debt while delivering key election commitments.
"We promised that we would target budget improvements ... today we are delivering on that promise," Treasurer David Janetzki told parliament.
However Queensland has been warned it may receive another credit rating downgrade with debt set to eclipse $200 billion for the first time, leading to higher borrowing costs for Brisbane 2032 projects.
Mr Janetzki looked at long-term budget repair after the LNP's October 2024 election success that ended Labor's nine-year reign.
He opted for a "mature and responsible" approach, more than a decade after the last LNP government sacked 14,000 public servants and cut frontline services under Premier Campbell Newman.
Mr Janetzki's mid-year budget update in January said debt expectations under the former Labor government model would exceed $217 billion by 2027/28 if left unchecked.
The treasurer on Tuesday said debt would be lowered to $190 billion by 2027/28 under the LNP.
But the state's debt is expected to reach a record $205 billion by 2028/29, sparking a warning from ratings agency S&P Global.
"Queensland's budget highlights a sharp deterioration in the state's finances," it said.Â
"It shows debt is increasing to cover the state's weak operating position and fund its large infrastructure pipeline."
The state's AA+ credit rating was downgraded for the first time in 15 years when it went from stable to negative in February.
S&P Global warned there was potential for further drops if the budget was not balanced within two years, a move that would ensure higher borrowing costs in the race to complete Brisbane Games projects.
Decreased credit ratings mean higher interest rates, making it harder to borrow due to the risk of not being able to pay it back.
The LNP's budget features $1.7 billion to begin construction on the Brisbane 2032 athletes' village and venues over the next four years.
The government outlined an $8.6 billion deficit in 2025/26, expected to improve to $1 billion in 2028/29.
S&P Global accused the LNP government of "refreshing" rather than "redesigning" its financial strategy, aiming to stabilise its ratio of debt to revenue.
Debt still continues to rise to fund operating deficits and a growing infrastructure budget, the agency said.
Mr Janetzki said Queensland had been hit hard by a $2.4 billion reduction of GST revenue in 2025/26, calling it a "kick in the pants", along with coal royalties falling to $6.1 billion compared to $10 billion in 2023/24.
The treasurer had earlier touted an improved bottom line thanks to capital expenditure savings, including scrapping Labor's pumped-hydro scheme and the "CFMEU" tax.
The LNP government still splashed out on its key election commitments - crime, health and housing.
"We are front-loading the investments into jobs and services now in this budget so Queenslanders can reap the benefits sooner," Mr Janetzki said.
After delivering landmark "adult crime, adult time" laws, the state government is investing $5.2 billion in its crackdown on offenders including $347 million to support the controversial legislation.
Health services are buoyed by a $33.1 billion investment, including an $18.5 billion plan to deliver 2600 new beds and three more hospitals.
The budget featured "targeted" cost-of-living support by restoring indexation to the Electricity Rebate Scheme for vulnerable households, expected to reduce the average power bill by $386.
Families will also receive $100 vouchers for every primary school student to help with costs.
A thousand first home buyers earning up to $150,000 will also benefit with 30 per cent equity in new builds and 25 per cent in existing homes up to $1 million.