Queensland is aiming to return to surplus within four years after the pandemic as the government uses a new accounting method to cut debt forecasts.
State Treasurer Cameron Dick has slashed the forecast 2020/21 deficit of $8.6 billion to $3.8 billion in his 2021/22 budget on Tuesday.
The deficit will be progressively trimmed until there's a small $153 million surplus in 2024/25.
"I'm not ordering any coffee mugs yet, but Queensland will be back in black," he told reporters.
Mr Dick said the bottom line had improved due to better than expected economic growth of 3.25 per cent in 2020/21, compared to 0.25 per cent forecast just six months ago.
Higher growth has led to forecast revenue from tax, GST receipts and property sales being $60.4 billion in 2020/21, $4.1 billion more than forecast.
The treasurer has also used a new accounting method to help trim debt forecasts.
The Queensland Titles Registry, valued at $7.8 billion, will be transferred into the state's Debt Retirement Fund.
About $6 billion of registry's value and its ongoing revenue will be an asset to offset state debt.
Total debt is now forecast to hit $95.8 billion in 2020/21, down from the $102.2 billion predicted just six months ago.
Debt will reach $127.3 billion in 2024/25, compared to the $129 billion by 2023/24 predicted in the last budget.
Mr Dick denied he was "cooking the books", saying NSW and Canada's Quebec province used the same accounting method.
"This is not new, it's new for Queensland, but this is an important measure that we are taking to bend back that debt profile and give Queenslanders value for the assets that belong to them," he said.
Mr Dick said the remaining $1.8 billion from the Titles Registry transfer will be siphoned off for housing, renewable energy and an Indigenous treaty.
There will be $1 billion for a new Housing Investment Fund and $500 million for a Carbon Reduction Investment fund to support land restoration projects.
The final $300 million will be put into a fund to roll out the state's Indigenous treaty.
The budget delivers $22.2 billion for health, including $482 million to relieve pressure on capacity and elective surgery waitlists, in 2021/22.
Another $480 million will be spent on Queensland's COVID-19 response in the current financial year.
Education has an allocation of $18.3 billion, including about $1.4 billion for 10 new state schools and upgrading facilities at existing schools.
About $1.9 billion will be spent on social housing over four years, in addition to the new housing fund.
"This budget is a traditional Labor budget, focusing on what Queenslanders need," Premier Annastacia Palaszczuk said.
Another flagship budget item is an extra $1.5 billion for the Renewable Energy and Hydrogen Jobs Fund.
The funding will be for government-owned firms to set up new renewable or hydrogen projects or enter public-private partnerships.
The budget also allocates $100 million for a Business Investment Fund and $320 million over four years to help upskill and train disadvantaged people to enter and stay in the workforce.
However, capital spending will be cut by $147 million from last year's $14.835 billion as COVID-19 stimulus is wound back in 2021/22.
Mr Dick said there would be $52.21 billion for capital expenditure over the forward estimates.
Australian Associated Press