Yesterday, Queensland’s Treasurer the Hon. Cameron Dick handed down his first budget as Treasurer. The budget focuses primarily on health, education and infrastructure spend, with majority of business support initiatives and grants already launched and made available earlier this year.
Building on a pre-budget spending blitz, this budget provides funding to implement election promises under the Unite and Recover Plan, a package of more than $7 billion for initiatives such as the Renewable Energy Fund, Backing Queensland Business Investment Fund, and payroll tax relief.
Mr Dick revealed that Queensland’s total gross debt is forecast to hit $122b by 2022-23, and about $130b by 2023-24, with a deficit of $8.63b expected in the 2020-21 financial year, due to reduce to $1.39b by 2023-24. According to the Australian Bureau of Statistics, the unemployment rate in Queensland is 7.7 per cent compared to the national figure of 7 per cent, but could be revised nationally in the December Mid-Year Economic and Fiscal Outlook.
Key highlights
- $21.8b of total health spending this financial year, with $1.6b towards the delivery of health infrastructure projects throughout Queensland.
- $17.5b for education and training, including $200m to invest in the future skills requirements, with $83.4m for future skilling programs, including $32.4m for the TAFE Priority Skills Fund and $25m for pre-apprenticeship support. An additional $21m has also been provided to extend free TAFE and free apprenticeships to Queenslanders aged under 25.
- Allocation of $140m to help small businesses to boost their competitiveness and resilience via a ‘Big Plans for Small Business Strategy’, which includes $100m from the previously announced Backing Queensland Business Investment Fund.
- Introduction of a public sector procurement target, with 25 per cent of government spend to go to small and medium businesses.
- $14.8b capital program works estimated to support 46,000 jobs, and a $6.3b investment in transformative transport infrastructure. In addition, $526.2m will be invested through capital purchases and grants to construct new social housing dwellings, upgrade existing properties and provide housing services, including in Indigenous communities.
- $40m in additional support for the Great Barrier Reef, including $6m to deliver ecotourism in the region, $5m in grants to support regional tourism operators reliant on international tourism to redesign their businesses, $25m for the Growing Tourism Infrastructure Fund, $25m for the Queensland Tourism Icons program, and $15m in aviation industry support.
- $40m to support the ‘Making it in Queensland’ strategy to secure advanced manufacturing jobs and the skills needed for existing and future industries. This includes a $15.5m boost to the Made in Queensland grants program, and $16.5m to develop advanced manufacturing skills, with two regional manufacturing hubs to be established on the Gold Coast and in Mackay.
- $21m to revitalise Queensland’s coastal shipping industry and create maritime jobs.
- $10m to support the development of Queensland’s hydrogen industry.
- $1b investment pipeline as part of a 10 year plan to deliver Queensland trains built in Queensland.
- Additional $200m for the Works for Queensland program supporting local governments outside South East Queensland.
- An estimated $6.3b allocated in 2020–21 for already existing discounts, fee waivers, rebates, and subsidies.
The Queensland Budget contains no new or increased taxes and the Queensland Government claims that Queensland continues to remain a low-tax state. However, Queensland has one of the highest stamp duty rates, one of the broadest bases for foreign surcharges and continues to impose duty on transfers of businesses. It is somewhat disappointing that the Government did not use the Budget to legislate the previously announced tax concession for small business restructures (see our article here). From what we are seeing, taxpayers are somewhat nervous in implementing restructures without certainty that they will be found to be exempt.
The Budget also sets out the revenue relief initiatives that were announced and delivered by the Queensland Government with the aim of providing economic support to businesses, households and employers, following the effects of COVID-19, being:
Payroll Tax
The Budget highlighted a range of payroll tax measures which the Queensland Government introduced during the COVID-19 pandemic to assist businesses and employers, including:
- Approving payroll tax refunds or holidays.
- Deferring payroll tax liabilities, so that businesses eligible for deferral will not have to make a payroll tax payment this calendar year, and will be able to pay deferred liabilities in instalments throughout 2021.
- A payroll tax exemption on the subsidised component of wages paid under the Australian Government’s JobKeeper program.
Land Tax
The Queensland Government implemented land tax concessions for eligible properties during the COVID-19 pandemic. These include:
- Land tax rebates for eligible properties for 2019-20 and 2020-21.
- A three month deferral of land tax liabilities for all land tax payers for the 2020-21 assessment year.
- A waiver of the land tax foreign surcharge for the 2019-20 year.
Gaming and Lottery Tax
The Queensland Government provided gaming tax relief for Queensland pubs and clubs impacted by the effects of COVID-19, including a deferral of March 2020 gaming machines taxes until June 2021. In addition, lotteries taxes for July to December 2020 could be deferred, to be paid in full before 1 April 2021, including by instalments due before that date.
