2015

On 14 July 2015, first-time Queensland Treasurer, Curtis Pitt, handed down the Labor government’s term-defining State Budget, promising Queensland’s largest surplus in nearly a decade for the 2015-16 year.

To get to this, some innovative 'self-funding' models will be implemented to achieve the government’s stated focus to create 'jobs for now and for the future', as well as creating a diversified economy to secure the State’s future.

The headline items from the Budget are:

  • a questionable $1.2 billion surplus for 2015-16, with combined surpluses of $6.9 billion over the next four years to 2017-18, despite a fall in revenue growth (down from 6.1% in 2014-15 to 3.2% in 2015-16) and a $3.2 billion write-down in mining royalties
  • a forecast debt reduction of $9.6 billion by 2017-18 albeit some financial engineering required to achieve
  • improvements in economic growth, from 2% in 2014-15 to 4.5% in 2015-16 and 2016-17 (purportedly the strongest of all the States)
  • moderate employment growth, increasing from 0.5% in 2014-15 to 2% by 2017-18
  • State debt reduction of:
    • $4.1 billion from re-gearing energy network businesses (which includes merging these businesses)
    • $3.4 billion by meeting Long Service Leave obligations on an ‘as required basis’ rather than holding a central investment allocation
    • $2 billion over five years through a time-limited suspension of annual employer contributions to the Defined Benefit Scheme 

Major announcements

Major announcements from the Budget included:

  • $10.1 billion of infrastructure spending in 2015-16, including:
    • $3.9 billion for road and transport projects, such as Gold Coast road upgrades to coincide with the Commonwealth Games, the Toowoomba Second Range Crossing, a sports stadium in Townsville, upgrading of the Gateway Motorway North to six lanes, additional duplication works on the Bruce Highway, regional infrastructure projects and rail network improvements
    • $2.4 billion for energy and water projects
    • $1.4 billion for health and community projects, including a $500 million State-wide Schools and Hospitals Fund
    • $607 million for related education and training 
  • a 4% increase in health spending to $14.2 billion in 2015-16, which will include the 2015-16 spend on the following:
    • delivery of an Outpatient Long Wait Strategy to reduce the number of people waiting longer than clinically recommended for a specialist outpatient appointment (total of $361.2 million over four years)
    • nurse training and employment (total of $212.3 million over four years)
    • the Sunshine Coast Public University Hospital (total of $193.5 million over four years)
    • upgrades to regional hospitals (total of $180 million over four years)
  •  a 7.2% increase in funding to the education sector, to $12.4 billion in 2015-16, which will include the 2015-16 spend on the following:
    • school building and maintenance projects (total of $739.2 million over four years)
    • lower class sizes and support for high schools (total of  $248.7 million over four years)
    • additional student places to the non-State school sector (total of 123.6 million over three years)
  •  implementation of the $1.6 billion Working Queensland jobs plan, which devotes:
    • $240 million to support and train 32,000 Queenslanders back into work over the next four years
    • $180 million over four years through Advance Queensland to invest in innovation, skills, education, business development and startups
  • an additional $128.3 million of funding over four years for Tourism and Events Queensland, to drive tourism growth in the State

Social responsibility

Social responsibility measures included:

  • an additional $100 million over five years to protect the Great Barrier Reef through water quality initiatives, scientific research and helping businesses in the primary production, mining and fishing industries transition to better environmental practices
  • $20 million over five years to develop the strategy for phasing out sand mining on North Stradbroke Island
  • $65 million for fire and emergency services facilities and equipment
  • $49.5 million over four years to support Aboriginal and Torres Strait Islander partnerships, including addressing the historical issue of reparation for wages stolen by the government of the time and services to promote socially responsible behaviours
  • $32.1 million over four years to government departments that deal with alcohol fuelled violence
  • $20 million over four years to the police to tackle drug, ice, organised crime and alcohol fuelled violence

Tax announcements

The tax announcements included:

  • a welcome three-year payroll tax exemption for new companies established in Queensland as part of the Advance Queensland program (details yet to be determined)
  • deferred implementation of planned increases in the payroll tax exemption threshold (which was to increase $100,000 on 1 July 2015 and each year thereafter until the threshold reached $1.6 million on 1 July 2019)
  • a payroll tax rebate equal to 25% of the wages paid or payable to apprentices and trainees, in addition to the wages being exempt from payroll tax until 30 June 2018 (rebate to be offset against the payroll tax payable on other wages)

Tony Windle, National Head of Indirect Tax, E tony.windle@au.gt.com T +61 7 3222 0381