• Queensland State Budget 2014-2015

The Queensland State Government handed down its Budget on 3 June 2014

 

The headline items from the State Budget are:

  • General Government expenses of $49.933 billion in 2014-15 represent an increase of $2.784 billion (or 5.9%) over the 2013-14 estimated actual period
  • the economy is forecast to grow 3% in 2014-15 and 6% in 2015-16
  • continuation of accommodative monetary policy and an improved property price outlook are forecast to support stronger growth in household consumption and dwelling investment
  • the unemployment rate for 2014-15 is estimated to be 6%, with a forecasted gradual decline to 5.5% by 2016-17
  • a fiscal surplus in 2014-15 is not possible given the scale of natural disasters, National Disaster Relief and Recovery Arrangements payments and revenue write-downs. A fiscal deficit of $2.271 billion (or 4.5% of General Government revenue) has been estimated

Major announcements
Major announcements from the State Budget included:

  • investment of $1.132 billion for roads and rail projects including increased funding to the Toowoomba Second Range Crossing and the Bruce and Warrego Highway upgrades
  • a proposed program of asset transactions to reduce debt by $25 billion and fund further infrastructure investment with a $8.6 billion injection, which will be implemented after the next State election. Assets under consideration and proposed transaction methods are:

    private sector investment: electricity networks (Powerlink, Energex, Ergon Energy – excluding retail business)

    long-term lease: Integrated Port of Townsville and Mt Isa Rail Line, Port of Gladstone

    sale: Ergon Energy retail business, SunWater industrial pipelines business, electricity generation businesses (Stanwell Corporation, CS Energy) and other non-core business functions such as a coal mine
  • the proposed $8.6 billion investment program in infrastructure includes:

    Rural and Regional Roads Fund = $1.5 billion

    South East Queensland Roads Fund = $1.5 billion

    Public Transport Rail Infrastructure Fund = $1 billion

    Bus and Train Project = $1 billion

    Future Schools Fund = $1 billion

    Rural and Regional Economic Development Fund = $700 million

    Local Government Co-Investment Fund = $500 million

    Future Fund (Natural Disasters) = $500 million

    Entrepreneurial and Innovation Fund = $500 million

    Community Hospitals Fund = $300 million

    Cultural Infrastructure Fund = $100 million
  • an increase of 7% in total funding for education (to $11.8 billion), including:

    10 new schools in South East Queensland, with the first two schools to commence at Burpengary and Pimpama in 2015

    construction of a new secondary school in Highfields

    continued investment in schools, early childhood education and training
  • an increase of 6% in total funding for health (to $13.6 billion) in the form of capital purchases, including:

    $224.5 million to continue delivery of the Lady Cilento Children’s Hospital

    $369.8 million to continue delivery of the Sunshine Coast Public University Hospital

    $173.3 million for the redevelopment of hospitals in Cairns, Mackay, Mount Isa, Townsville and Rockhampton

Social responsibility From a social responsibility perspective, the State Budget included:

  • $406 million over five years to implement the first stage of the Carmody Inquiry into the child protection system
  • an increase of $5 million in funding to a total of $55 million over five years for the Reef Water Quality Program to protect the Great Barrier Reef 
  • $62 million over two years on a Drought Assistance Package for rural producers (including assistance from the Federal government)

State taxes Announcements in relation to State taxes included:

  • General Government Sector departments (excluding commercialised business units) and Queensland hospital and health services will no longer be subject to payroll tax from 1 July 2014
  • an increase in the payroll tax threshold to $1.6 million by 1 July 2019 ($100,000 increase every year from 1 July 2014)
  • the Land Tax Act 2010 will be amended from 2014-15 to provide an exemption from land tax for land that does not receive a home exemption, because the owner is selling their old home and moving into a new home (conditions apply)
  • the primary production business transfer duty concession will be extended to also apply to non-lineal descendants (with effect from the date of Royal Assent)