Queensland mid-year budget review: Ergon and Energex merged, $1 billion debt transferred to government-owned corporations

Debt will be "regeared" into Gladstone Ports, North Queensland Bulk Ports and SunWater, that is on top of the $4.1 billion transferred to GOCs in the July budget.

When combined with the dividends from electricity generator Stanwell, state debt will be reduced by $1 billion, Mr Pitt said.

General government sector debt will now be $10.6 billion lower in 2017-18 than it would have been.

Labor's pre-election promise was to reduce it by at least $5.4 billion over six years with a target of $12 billion in reductions over 10 years.

The surplus for this year would be $1.2 billion, which is in line with the July budget forecasts, and economic growth of 4 per cent will lead all Australian states this year, Mr Pitt said.

"We will see surpluses totalling over $1 billion each and every year out to June 2019," Mr Pitt said.

"We have achieved this while meeting our commitment to no new fees, taxes and charges, and no change to royalties, this term of Government."

Mr Pitt said the economic conditions have become tougher since the budget, and as a consequence, revenue write-downs now total $1.5 billion over the forward estimates compared to budget time.

The mid-year review also revealed the cost of expanding Cabinet from 14 to 17 ministers will be $6 million a year, to be offset by reductions in government advertising, contractors and consultants.

Ergon and Energex to be merged, 'saving $680m'

Electricity distributers Ergon and Energex will be merged by mid-2016, with Powerlink left out of the amalgamation despite original plans.

Meanwhile, anti-competition concerns have forced the State Government to abandon the merging of power generators CS Energy and Stanwell.

The new headquarters of the merged Ergon and Energex will be based in Townsville.

"Together, Energex and Ergon Energy will become Australia's largest energy company with assets totally more than $24 billion," Mr Pitt said.

Mr Pitt predicted 500 jobs would be created from the merger.

However overall 366 people will lose their jobs all four energy businesses between now and 2020, but Mr Pitt said there will be no forced redundancies.

He predicted the changes would save about $680 million in 2019-2020.

"The merger would remove duplication in areas like administration, shared services, boards, management and corporate costs," he said.

Source: http://www.abc.net.au/news/2015-12-15/mid-year-budget-review-pitt-1-billion-transferred-ports-water/7028358