- Tax Alert: Newman Government releases a State Budget to prepare Queensland for future growth
The Newman Government handed down its much “pre-reported” State Budget this week. With most of the policy announcements made prior to the actual Budget day release, the Government itself described the Budget as:
“…focussed on growing our economy, rebuilding Queensland and making our communities more resilient for the future. The Government is unashamedly pro-growth; we will work to grow the economy. We are also continuing the task we began last year to rebuild the State’s finances – a task made all the more difficult after the January 2013 natural disasters and falling revenue…”
Need to know
This Budget delivers on the basics by increasing funding for Health, Education, Community Services and Law and Order. The National Disability Insurance Scheme will be fully funded. Revenue is expected to fall in line with a decrease in government grants, predominantly from the Queensland share of the GST pool that is reducing as consumers increase savings and direct discretionary spending towards GST-free products.
The headline items from the Budget are:
- $8.7bn deficit in 2012-13
- $7.7bn deficit in 2013-14
- Economic growth of 3% in 2013-14
- Unemployment forecast to be 6% in 2013-14 and 5.5% in 2015-16
- Large investment in natural disaster relief recovery measures, and planning for the future
- $537m over five years to boost teaching and discipline in schools
- $100m extra for school maintenance
- $886m for the National Disability Insurance Scheme
- $384.3m over four years to operate and maintain health payroll system
- $147m over four years to address the backlog of hospital maintenance
- 267 new police officers
Stamp Duty on insurance will rise to 9% and there will be an $11.20 rise in the emergency management, fire and rescue levy.
As previously reported, the planned increase in the payroll tax threshold from $1.1m to $1.2 m will be deferred to 2015.
The Government has said “The financial repair task is a long-term task…” and that it is “…a journey over a number of years and a task we mustn’t shirk.”
That would certainly appear to be the case and whilst it is disappointing there are no major policy initiatives or announced growth programmes by way of investment in much needed infrastructure, the focus on management of the Queensland debt position has to be the Newman Government’s priority.