THE Queensland Government claims it will save enough money to fund 1300 hospital beds, 250km of dual carriageway on the Bruce Hwy, 16,250 new teachers and 26 brand new primary schools by 2014-15.
Treasurer Tim Nicholls said there would be no more Oliver Twist asking "please sir can I have some" as Queensland stopped living beyond its means and reported a $652 million fiscal surplus by 2014-15.
This came as he revealed he would increase rates for coal royalties to 12.5% when the value per tonne hits between $100 and $150 and 15% thereafter.
Queensland Resources Council chief Michael Roche said the hike in coal royalties was worse than feared and would result in more job losses, the risk of further mine closures and the near certainty numerous major new coal projects would not see the light of day.
Mr Nicholls also confirmed there would be 14,000 full-time equivalent jobs lost in 2012-13, with 10,600 receiving redundancies.
The rest of the cuts come from not filling vacant positions and removing temporary and contact staff.
Mr Nicholls said all FTE public service losses would be confirmed in this financial year to give public servants certainty and he expected the impact of these measures to reach $3.7 billion over the forward estimates.
"The sad reality that some people have lost their jobs should not be seen as a reflection on them or their performance," he told Parliament.
"The fault lies squarely with the cowardice of the former Labor government."
Mr Nicholls said the "strong medicine" he was serving to Queensland's finances was the only way he could stabilise Queensland's debts and chart a path to regain a AAA credit rating.
He said the fiscal deficit for 2012-13 was expected to reach $10.768 billion, including a one-off $800 million allowance for redundancy payments and flood/cyclone recovery obligations.
Mr Nicholls said this would mean the Queensland government would still need to borrow in 2012-13.
But he told Parliament the fiscal deficit would be reduced to $3.752 billion in 2013-14, representing a $7.016 billion turn around in one year, ahead of a surplus the following year.
"This will be the first time in nine years the state will have a genuine budget surplus and live within its means," he said.
"Maintaining that balance, in the absence of extraordinary events, will complete the first stage in repairing Queensland's finances.
"Had Labor saved in the boom, we wouldn't have suffered financially as much from the GFC, the cyclones and the floods.
"Reform can be unpopular in some parts of our community.
"It challenges the elites, the unions, the industrial relations clubs and the commentariat.
"It challenges those for whom the old ways were the most lucrative, the most comfortable and that entrenched their own feelings of self-importance."
Mr Roche said he expected the new royalty structure would drive investment away from Queensland, most likely to Malaysia and Indonesia where costs were much cheaper.
"The combination of company income tax and the new royalty rates will mean Queensland carries an effective taxation rate of 50% on a typical coking coal operation," he said.
"The government was told that the average cash cost for Queensland coking coal mines - before imposts such as carbon tax, company tax and depreciation - is now over $US100 per tonne.
"Yet they have deemed fit to lift the royalty rate for coal sold above $100 per tonne by 25% and introduce a new levy of 15% once the price hits $150 a tonne - a whopping 50% increase."
The public service union labelled it a "black day" for the public service, especially for regional Queensland.
Together union secretary Alex Scott said this was the largest number of job cuts ever seen in the public sector and it was shocking people would find out they were sacked from today via email.
"This budget will destroy jobs in the mining industry, destroy jobs in the community sector and will destroy jobs in the public sector," he said.
$1.3 billion to construct, expand and redevelop hospitals across Queensland
$4.8 million for research to develop Queensland as the food bowl of Asia with a focus on pulses
$200 million school maintenance fund to fix maintenance backlog at public schools
$15 million three-year trial to assist elderly parent carers of people with a disability
$15,000 first home owner construction grant