The Queensland Government expects revenue from insurance taxes to grow by 10.6% this financial year, reflecting increased coverage and premium growth.

It would see an increase from $556 million in 2011/12 to $615 million in 2012/13.

A further $670 million has been budgeted for the collection of taxes on insurance, up from $613 million in 2011/12.

Two days after the Government announced the figures as part of its debt-reduction strategy, Fitch Ratings downgraded the state from “AA+” to “AA”, with a stable outlook.

“The downgrade reflects Fitch’s view that Queensland’s overall credit profile is no longer consistent with an AA+ rating,” the agency said. “The state’s fiscal position and debt matrix have deteriorated over the past four years and Fitch does not expect a recovery for at least two more years.”

While employment has fallen across various sectors in Queensland, it has risen in disaster-recovery industries such as insurance.

The Government says recovery from recent natural disasters in 2011/12 was “slower than expected” and many operations are still dealing with the aftermath of flooding.

Natural disaster grants account for most of a $1.251 billion increase in local government funding, bringing the figure up to $3.226 billion for 2012/13. The grants are for rebuilding infrastructure after the floods and Cyclone Yasi.

The Queensland Government recently increased the average WorkCover premium by 2% to 1.45%. The scheme is currently under review.