Queensland Government extends rent relief provisions, invests $4b in further relief measures
In a pre-election spending blitz, the Queensland Government has committed a further $4b to stabilise Queensland’s economy.
The spending includes a $500m Renewable Energy Fund, a $500m Backing Queensland Business Investment Fund, a further $250m of payroll tax relief and additional land tax relief. The sting in the tail for commercial landlords is the announced extension of mandatory rent relief.
Renewable Energy Fund
The $500m Renewable Energy Fund will provide further subsidies for clean energy developments and infrastructure, in a bid to boost economic recovery. This announcement builds on existing $145m committed for Renewable Energy Zones in August 2020. The proposed Renewable Energy Zones of South, Central and Northern Queensland is intended to support new infrastructure for future wind and solar projects across the state.
Backing Queensland Business Investment Fund
The ‘Backing Queensland Business Investment Fund’, is to be managed by the state-owned Queensland Investment Corporation (QIC), with the intention of injecting funds into Queensland business and industry.
Those eligible for support include small and medium sized businesses based in Queensland, who:
- Will create Queensland-based jobs.
- Have a proven product and defined market opportunity, but are lacking capital to build scale or grow market share.
- Are relatively mature, (can demonstrate they are beyond proof of concept and are profitable or approaching profitability).
- Need capital to expand or restructure operations, enter new markets or finance acquisitions.
- Represent well established and reputable owners who are committed to growing the business from and in Queensland.
Payroll tax relief
The Palaszczuk government has extended the existing payroll tax relief, committing a further $250m of relief for small and medium-sized businesses with total wages of up to $6.5m. The extension will cover payroll tax payments for July and August, and allow the business to pay off of existing payroll tax-deferred liabilities for 2021.
Rent relief
The Queensland Government has extended the State’s mandatory rent relief provisions for commercial leaseholders an additional three months, with the new regulations now set to expire on 31 December 2020.
The news is a blow to landlords, who have been the only section of the business community mandated to provide relief to others. While Government is considering removing the requirement that 50% of the relief is offered in the form of waived rent (ie. never to be received), this is yet to be finalised.
The trade-off for landlords is a further land tax rebate of 25% for 2020/21 for eligible properties. Landlords have until 26 February 2021 to apply for the rebates, which can be accessed here.
Queensland outlook
The latest announcements bring Queensland’s forecasted tax deficit to a record $8.1b for the 2020-21 financial year. However the spend has resulted in a better than expected unemployment rate (released this week of 7.5% after the State’s own estimate that it would reach 9% by December 2020), and only 1.1% of Queenslanders working 0 hours in August (from a high of 5.2% in April). The debate will continue in relation to the impact of continued state border closures and what the Queensland economy will look like post-election. The ability to avoid a second wave of any significance in Queensland has meant positive signs for keeping business operating, though the constraints of operating within the “Queensland bubble” will soon begin to show for many businesses.
