Queensland is forecast to achieve its biggest operating surplus in nearly a decade despite significant declines in projected mining royalties.
Treasurer Curtis Pitt has unveiled a positive state budget that's predicting a $1.2 billion surplus this financial year - the state's largest since 2006/07.
The state made a $962 million operating surplus in 2014/15.
Queensland is expected to continue to earn more than it will spend with surpluses exceeding $2 billion in 2016/17 and in 2017/18 despite forecasts of significant write-downs in royalty revenue and payroll tax revenue.
Overall revenue growth is projected to be 3.2 per cent this financial year, almost half of the 6.1 per cent in 2014/15.
Steep falls in coal and oil prices have contributed to a $3.2 billion write-down in royalties since the mid-year economic review.
The decline in mining investment has contributed to a $396 million write-down in payroll tax revenue.
However, Mr Pitt says an increase in LNG exports and a measured approach to balancing the books will drive the bigger surpluses.
"We will see significant pick up in LNG royalties even though the revenue write-downs are about $3 billion across the forward estimates," he said.
"We are experiencing a downturn in commodity prices but also through the price of oil which is affecting LNG."
He said while there was less demand from China for coal, India's appetite for thermal coal was on the rise.
The state's economic growth is forecast to rise from two per cent to 4.5 per cent in 2015/16.
Mr Pitt said this was stronger growth than any other state in the country.
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