Queensland State Budget 2017-18

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Queensland State Budget 2017-18

15 Jun 2017

Queensland State Budget 2017-18

Continuing with Labor’s election theme of creating ‘Jobs for Queensland’, Treasurer Hon Curtis Pitt MP handed down the Queensland State Budget on 13 June 2017 with a high-spending mandate focused on employment and infrastructure.

The headline takeaways from the Budget are:

A net operating surplus of $2.8 billion in 2016-17;
A relatively small operating surplus of $146 million for 2017-18 (Cyclone Debbie is estimated to cause a $1.1. billion hit on the State’s bottom line);
Economic growth of 2.75 percent to continue from 2016-17 to 2017-18;
Retention of AA+ credit rating by S&P Global and Aa1 rating by Moody’s Investor Services;
$42.75 billion capital works expenditure over four years, including a $10+ billion program in 2017-18. and
$13.7 billion investment in education, a 6.4% increase on last year.

At the heart of this Budget is substantial spending in both metropolitan and regional areas, as the Labor government seeks to ensure support ahead of the next State election widely tipped to be called for November 2017. Infrastructure projects, reducing unemployment, a first-rate health service system, and a quality education framework are the key areas of spending in this Budget.

Unlike the budgets of other States, no new taxes on small or mid-sized business were introduced, with the view of maintaining the decade-high small business confidence. Further, the Budget provides a continual financial support framework for the 2020 Advancing Small Business Queensland Strategy.

Further, the Budget has focused on maintaining a competitive tax status against other States and Territories, with the goal of attracting individuals and businesses to Queensland from interstate, especially from New South Wales and Victoria. With that in mind, Queensland per capita State tax is estimated at $2,691 in 2017-18, compared to an average of $3,534 for the other States and Territories, providing a great opportunity for growth in Queensland.

Summary

For more in-depth information on the Queensland State Budget 2017-18, read the below summaries:

Major announcements
State taxes changes

Major Announcements

Specifically, the Budget delivers the following:

Health

$728 million in 2020-21 to support health and ambulance services
$548.9 million for the National Disability Insurance Scheme (NDIS)
$208 million to upgrade health facilities and supporting infrastructure in rural and regional Queensland
$200 million to enhance public hospital capacity and services in South East Queensland, including
$131.8 million for detailed planning and preparatory works for proposed redevelopments at Logan, Caboolture and Ipswich hospitals
$68.9 million for a new adolescent mental health facility at for detailed planning and preparatory works for proposed redevelopments at Logan, Caboolture and Ipswich Hospitals
$149 million to provide free dental care to eligible Queenslanders under the Oral Health Scheme which supports rural and remote areas where no private dental practitioner exists
$126.5 million in 2017-18 for initiatives aiming to reduce specialist outpatient long waits
$122.8 million over four years to enhance South East Queensland public hospital capacity and services

Infrastructure

$3.89 billion for transport and roads, including
- $252.5 million towards construction of the Toowoomba Second Range Crossing
- $236.3 million towards widening the Gateway Motorway North, south of Nudgee, to six lanes

$2.063 billion for the energy and water sectors to support the Government to deliver cost effective, safe, secure and reliable energy and water supply
$1.95 billion over three years (increasing the total spend to $5.41 billion) for the Cross River Rail, Queensland’s highest priority infrastructure project
An additional $771 million to support the stabilisation of Queensland electricity prices, bringing the funding of the ‘Powering Queensland Plan’ to $1.16 billion
$916.1 million for health infrastructure, including investments in health facilities and supporting infrastructure across urban, rural and regional areas
$604.6 million for the construction and refurbishment of school educational facilities, early childhood education and care services, as well as training assets
$200 million for improvement works in connection with the Burdekin Falls proposed hydro-electric power station
$176 million over two years from 2018-19 to expand the Cairns Convention Centre
$140 million contribution for the new North Queensland Stadium
$120 million over four years from 2016-17 to address priority works relating to water, wastewater and solid waste assets in 16 Indigenous councils
$120 million for the Cairns Shipping Development project

Education

Additional funding of $590 million over five years to address enrolment growth pressures in State schools
$314.8 million in programs to provide children with access to quality early childhood education and care
$250 million for new secondary school classrooms and other infrastructure to cater for an additional 17,000 students in 2020
$200 million in additional funding towards 98 school infrastructure projects, $100 million of which is for building new and upgrading school halls at 30 State schools
An additional $200 million to build fit for purpose learning environments to support educational outcomes and address enrolment growth pressures

Social responsibility

$1.1 billion to restore essential public assets such as roads, bridges and other community infrastructure following Severe Tropical Cyclone Debbie
An additional $676.4 million over four years to significantly increase the supply of affordable housing and $120 million for related services
An additional $400 million over three years for the Works for Queensland program for local governments to undertake job-creation maintenance and minor infrastructure maintenance outside of South East Queensland
$120 million over four years for water, wastewater and solid waste infrastructure in Indigenous communities
$108 million for new and updated fire and emergency facilities, vehicles and essential communications equipment
Increased funding of $88.5 million (part of a total package of $175 million) over the next five years to deliver the Great Barrier Reef Water Quality Program
$82.4 million over three years for increases in award rates for social and community service employees per the Fair Work Australia’s 2012 Equal Remuneration Order
$66.5 million over three years for police annual wage increases and expanded services given the 2018 Gold Coast Commonwealth Games

Justice system

Funding of $249 million over six years to overhaul the parole system, including funding for stricter supervision of parolees and improved rehabilitation of offenders
An additional $200 million over four years to strengthen the child protection system, including funding to respond to critical issues following the release of the Queensland Family and Child Commission report in respect of the death of Jet Mason Lee
$200 million for the expansion of the Capricornia Correctional Centre to ease overcrowding in the prison system
$199.6 million to support the transfer of 17 year olds from the adult justice system to the youth justice system and provide pathways to reduce offending behaviour

State taxes changes

The budget delivers the following State taxes changes:

Extension of increased payroll tax rebate for apprentices and trainee

The Government has continued the payroll tax rebate on the wages of apprentices and trainees at the increased rate of 50% (up from the previous 25%) until 30 June 2018.

This means that employers who hire apprentices and trainees will receive a payroll tax rebate of 50% on their wages in addition to their wages being exempt from payroll tax until 30 June 2018.
Surcharge for absentee payers of land tax

A 1.5% surcharge for absentee payers of land tax has also been announced.

The surcharge will apply to land holdings of $350,000 or higher, in addition to other land tax payable from 1 July 2017.

The aim of the surcharge is to ensure that absentee owners of land make a fair contribution towards the cost of services and infrastructure that they benefit from, which are generally borne by residents and businesses, and will have no direct impact on Queensland residents.

The land tax surcharge announced brings Queensland in line with Victoria’s land tax surcharge and will be slightly lower than the 2% land tax surcharge that NSW has announced in the lead-up to its forthcoming State budget.
Extension of the of the First Home Owners’ Grant

On 1 July last year, the First Home Owners’ Grant was temporally increased from $15,000 to $20,000 until the end of June 2017.

Additional funding of $30 million has now also been announced which will be used to extend the increased grant for a further six months until 31 December 2017, being for contracts signed between 1 July 2017 and 31 December 2017.

The grant is only available for the purchase of new houses, units or townhouses valued at less than $750,000.

Queensland State Budget 2017-18

Continuing with Labor’s election theme of creating ‘Jobs for Queensland’, Treasurer Hon Curtis Pitt MP handed down the Queensland State Budget on 13 June 2017 with a high-spending mandate focused on employment and infrastructure.

The headline takeaways from the Budget are:

Summary

Major Announcements

State taxes changes

Should you have any queries how the Queensland State Budget measures will impact you and your organisation, please contact your usual Grant Thornton advisor or: