- Queensland State Budget 2019-20
Treasurer Hon Jackie Trad MP handed down the Queensland State Budget on 11 June 2019. This Budget has a strong focus on job creation and supporting regional employers and small to medium businesses.
The Queensland Government claims that 2019-20 Budget measures will support improved education outcomes by Queensland students, improved education infrastructure, increase capacity in the health system, attract investment to Queensland and create jobs to support Queensland’s regions and keep communities safe.
State of the Queensland economy
- Queensland’s 2.75% forecast growth in GSP in 2018-19 is expected to outpace forecast national GDP growth of 2.25%.
- GSP is forecast to grow to 3% in 2019-20 prior to decreasing to 2.75% over the forward estimates period beyond the 2019-20 financial year.
- Net operating surpluses are projected in each year of the forward estimates, starting with $189 million in 2019-20.
- Employment is expected to grow at moderate rates of 1.5% in 2018-19 and 1.25% in 2019-20.
- A $49.5b capital program over four years will deliver infrastructure that supports economic growth across Queensland, enhances frontline services and provides employment opportunities.
Road, rail and infrastructure
The 2019–20 Budget includes a $12.941b capital works program investing in the following:
- $777.7m in health capital expenditure.
- $290m in the 25,000-seat North Queensland Stadium.
- $5.625b in transport infrastructure including continuation of construction work on Cross River Rail, major upgrades to the M1 Pacific Motorway and the Bruce Highway; and ongoing work on the Smithfield Bypass project.
- $2.66b to support the ongoing delivery of safe, secure, reliable and cost-effective energy and water supplies.
- $1.227b for the construction of new schools and education facilities, as well as significant enhancements to existing buildings.
- $153.6m to upgrade dams and water supplies in South East Queensland.
- $479.3m investment in social housing.
- $160.8m over four years for the Beerburrum to Nambour North Coast Line railway duplication.
- $70m for local government regional infrastructure projects, as part of the Building our Regions program.
- $1.599b in capital grants, including $50m as part of the Works for Queensland program for infrastructure in regional communities.
- $50m to continue the Works for Queensland program to support job-creating maintenance and minor infrastructure works across regional Queensland.
This Budget provides $18.5b in operating funding as well as a $777.7m capital program designed to maintain Queensland’s health service. This includes:
- $956.9m for the Government's Building Better Hospitals Program.
- $78.6m for the Enhancing Regional Hospitals program which will include upgrades/redevelopments at Gladstone and Roma hospitals.
- $116.8m over two years from 2021–22 and $59.3m annually from 2023–24 to continue the successful nurse navigators program.
- $58.5m over four years from 2019–20, with ongoing funding of $15.3m annually, for community helicopter providers to support Queensland’s Emergency Helicopter Network services.
- Increased funding of $77.4m in 2020–21 to extend the Specialist Outpatient Long Wait Strategy.
- $80.1m over four years for a range of initiatives that better support suicide prevention under the Shifting Minds Suicide Prevention Flagship.
- $885.7m is being provided to the Queensland Ambulance Service in 2019–20 – up 10.7% from the previous year.
The 2019–20 Budget delivers more teachers and teacher aides, as well as significant funding to enhance frontline education services and improve educational outcomes across the state. These include:
- $1.1b for Queensland state schools, as part of the five-year school funding agreement with the Australian Government.
- $532.6m over seven years from 2018–19 to expand the Building Future Schools Fund to a total of $1.3b, to deliver world-class learning environments for students, including new primary, secondary and special schools opening in 2020 and 2021.
- $235m over four years to 2021–22 to enhance and upgrade facilities in identified state schools across the state.
- $30.4m over two years to support the continued provision of universal access to kindergarten for children in the year before school.
- Increased funding of $63.6m over four years and $18.7m per annum ongoing to continue the provision of early childhood development programs and services to support children aged 0–5 years with significant educational support needs
Skills and training
The Budget outlines a number of programs and initiatives which support Queenslanders to be competitive and succeed in a modern and changing economy. The key funding programs designed to skill Queenslanders for the jobs of the future include:
- $80m as part of a $420m, six-year commitment to the Skilling Queenslanders for Work program.
- $105.8m for upgrades and improvements in Queensland’s training infrastructure.
- $5.5m over three years for the Micro-Credentialing Pilot to support industry-led skills development designed to address emerging workforce skills requirements.
- $4.6m over five years for the Digital Engagement Strategy to improve online accessibility of vocational education and consumer training information for young people.
- $11.2m over four years for an expansion of the Regional Youth Engagement Hubs program to locate, case manage and re-engage early school leavers back into school and training.
The 2019–20 Budget continues to support Queensland’s innovation sector through a number of programs. These include:
- $19m over four years to support the Queensland Hydrogen Industry Strategy, reinforcing the Government’s commitment to develop a world-class sustainable hydrogen industry, with Gladstone being a key focus for hydrogen development.
- Continued investment since 2015–16 in the $755m Advance Queensland initiative with additional funding of $105m from 2018–19, to foster innovation to create jobs and build a strong and diverse Queensland economy.
- $8.6m over two years to establish FibreCo, to improve internet speed in regional Queensland.
- $25m over four years for the Queensland Government Research Infrastructure Co-Investment Fund for critical co-investment in facilities with partnerships and joint ventures designed to put our science facilities and researchers in a nation-leading position.
Measures aimed at keeping Queensland’s communities safe, protecting the environment and supporting communities include:
- $2.4b Police operating budget in 2019–20 as well as $69.8m capital for new, upgraded and replacement police facilities.
- $847.9m investment across Queensland’s justice system through a series of new and ongoing programs designed to enhance justice and safety outcomes.
- The 2019–20 Budget continues to support the Palaszczuk Government’s delivery of the record $330m, five-year allocation to protect the Great Barrier Reef.
- $67.1m over four years to support the delivery of the Aboriginal and Torres Strait Islander Housing Action Plan.
- An additional $25.2m over three years from 2020–21 and $8.6m annually from 2023–24 to expand the Deadly Choices Healthy Lifestyle Program for Aboriginal and Torres Strait Islander Queenslanders.
- $62.7m over four years to continue state services to support people with disability.
Land Tax Changes
The following changes are to take effect from 30 June 2019:
- Land tax rates will be increased by 0.25% for companies and trustees with aggregated landholdings over $5m as follows:
- Landholdings of up to $10m – increase from 2% to 2.25%; and
- Landholdings of more than $10m – increase from 2.5% to 2.75%.
- Further to our recent article in relation to land tax surcharges, the definition of ‘absentee’ for land tax purposes will be changed to ensure that Australian citizens and permanent residents (including some NZ citizens who have an appropriate visa) are not assessed as absentees. This change brings Queensland into line with other major Australian States.
- However, this measure coincides with the Introduction of a broader land tax foreign surcharge of 2% to apply to foreign companies and trustees of foreign trusts that own land. The surcharge will apply to the portion of the taxable value of the taxable land that is equal to or greater than $350,000.
- The broader regime does not seem to be confined to residential land like New South Wales.
- We understand that the Queensland Government is considering an ex gratia relief process for certain taxpayers. If Queensland follows the Victorian approach (which also applies to all taxable land), we expect such relief to apply to significant land development and/or significant physical operations in Queensland. Passive investment is generally excluded from ex gratia relief.
- In keeping with the trend established by Tasmania and Victoria, the surcharge rate will be increased from 1.5% to 2%.
Payroll Tax Rate and Threshold Changes
- The Payroll tax-free threshold is to be increased from $1.1m to $1.3m for 2019-20, benefiting employers with annual taxable wages of up to $6.5m. The Government estimates that approximately 1,500 Queensland businesses will fall below the threshold and pay no payroll tax as a result of this change.
- The Payroll tax rate for businesses with annual taxable wages above $6.5m is to be increased by 0.2% from the standard 4.75% to 4.95%.
- From 1 July 2019, a 1% payroll tax discount will apply to the above rates for regional employers. This applies to businesses with a registered business address in regional areas and where 85% of taxable wages are paid to employees who reside in regional i.e. this effectively includes eligible employers with 85% of their employees outside of South East Queensland. The payroll tax rate for medium-size businesses (up to and including $6.5m payroll), and large businesses (payroll of $6.5m and over), is therefore reduced to 3.75%, and 3.95%, respectively.
Payroll Tax Incentives
- Similar to previous incentives such as the Jobs Action Plan in NSW and Job Accelerator Grant Scheme in SA, there will be measures introduced to reward employers for Job creation. For two years from 1 July 2019, Queensland employers who have a net growth in total full-time employees over a year will be eligible for a 100% rebate on the payroll tax relative to net growth in employees, capped at $20,000.
- In addition, the current Apprentice and Trainee payroll tax rebate, which is paid at 50% of apprentice and trainee wages, will be extended until 30 June 2021.
- The petroleum royalty rate will be increased from 10% to 12.5% of wellhead value from 1 July 2019, with a transitional rate of 11.25% applying for the annual return period ending 31 December 2019.
- The Duties Act 2001 (Duties Act) is amended to clarify when references to consideration include both monetary and non-monetary consideration.
- There are also amendments to the Duties Act which seek to counter the Danvest decision (Commissioner of State Revenue v Danvest Pty Ltd & Anor  VSCA 382), which will now require taxpayers to look through partnerships who hold land for the purposes of landholder duty.