Qld to release mid-year economic review

© istockphoto.com/ Mihails Jershovs

THE Queensland government is on Friday expected to reveal details of how it plans to fund a new $1.7 billion Gold Coast Rapid Transit project.

The 13-kilometre light rail project, to operate from 2014, will be a key plank of the mid-year economic and fiscal review to be unveiled by Queensland Treasurer Andrew Fraser at 10.15am (AEST).

It is understood that the Federal Government's contribution, which was originally expected to be a grant, will now be an equity investment and this will marginally blow out the expected Queensland budget deficit for 2009/10.

The state budget in June forecast a deficit of $1.954 billion for 2009/10, on the back of a $15-billion dip in tax revenues over the period 2008/09 to 2011/12.

However it is understood the deficit is now forecast at more than $2 billion.

It is also expected that the state's economic growth forecast for this financial year will return to a positive, despite the June budget forecasting a 0.25 per cent contraction in the state's economy and a 6.5 per cent year-average unemployment for 2009/10.