Queensland's summer of natural disasters has hammered the state...

Queensland's summer of natural disasters has hammered the state budget by more than $800 million, with mining royalties alone $500 million lower than forecast at the start of the year.

Tuesday's state budget will show it will take a further five years before the state's finances return to surplus.

Coal royalties for the year will total $3.2 billion, well below the $3.7 billion forecast in last year's budget. This comes on the back of lower production volumes due to many mines inundated with floodwaters.

Treasurer Andrew Fraser said the mining industry lost nearly $6 billion, agriculture lost $1.4bn and tourism lost $400m. He explained the state's economy had been hit first by the global financial crisis followed by natural disasters. But the government, he added, was determined to meet its commitment to return the budget to surplus.

He said the government's $15 billion asset sales program was paying dividends, with debt levels lower than $70.3 billion, which was originally forecast two years ago.

The budget will show the state's debt will hit $52.8 billion by the end of this financial year, with the proceeds from the asset sales helping to drive down forecast debt by $17.5 billion.

The State Government is hoping the massive investment in Queensland's mining and gas industry will provide impetus to the rest of the economy. While the budget forecasts that business investment will rise by 27 per cent in the coming year, the vast majority of this is is for coal seam gas projects in central Queensland.

At least two major projects - one operated by the Britain's BG Group and the other by Santos - are set to spend the bulk of their $15 billion on projects in 2011-12.

Several more mines are expected to come on line in 2011-12, and much of the investment forecast for the development of Queensland's new coal hub, the Galilee Basin, will take place in that year.

http://www.myresources.com.au/news/3794-natural-disasters-drag-qld-budget-down-