2017-18 Queensland Budget

Queensland Treasurer Curtis Pitt this afternoon handed down the State Budget, seeking to frame the Government’s economic credentials in advance of the next election and unveiling a net operating surplus of $2.8 billion in 2016-17. The Budget puts forward a politically cautious agenda, focusing on new infrastructure spending, jobs in the regions, and limited cuts to Government programs. In his address to Parliament, the Treasurer was upbeat about the state of the Queensland economy, saying “In short, confidence has made a comeback.”The Government has committed to fully funding the construction of the Cross River Rail project, with a commitment of $1.95 billion over the forward estimates – in addition to the $850 million already committed – so that early works can start by the end of 2017. The Treasurer criticised the Federal Government for refusing to fund the “economy-shaping project”, saying “Queenslanders will not forget.”

The Treasurer acknowledged the economic impact of Cyclone Debbie, which is expected to shave around $2 billion from economic growth over the 2016-17 and 2017-18 financial years. The Budget sets out an estimated actual growth rate (GSP) of 2.75 per cent in 2016-17, and outlines a $42.75 billion capital works program over the four-year forward estimates.

With next year’s election expected to be fought in regional Queensland, the Budget sets out $4.8 billion in infrastructure spending for key regional centres, including Mackay and Townsville. The Government has also pledged a $386 million boost for energy investment – including clean energy projects – in the State’s north, in a plan expected to create up to 5,000 jobs. Additional regional spending includes $225 million to address water security for Townsville and $176 million for a Cairns Convention Centre expansion.

Once again signalling the proximity of the 2018 State Election, vehicle registration increases will be capped at 3.5 per cent and the Government’s $20,000 First Home Owners’ Grant will be extended by six months until 31 December 2017. The Government will also provide $770 million to fund the Solar Bonus Scheme to avoid these costs being passed on to consumers, along with a $400 million boost to concessions to ease pressure on household budgets. Harking back to Labor values, the Government has committed $1.8 billion to funding 5,500 social housing and affordable homes over the next decade.

The Opposition, in its initial response, has focused on an under spend on infrastructure and questioned the Government’s infrastructure and economic credentials.

• A net operating surplus of $2.8 billion in 2016-17, reducing to $146 million 2017-18 and $117 million in 2018-19
• In 2017-18, General Government debt is expected to be more than $14 billion lower than forecast in the 2014-15 Budget
• Annual economic growth forecast of 2.75 per cent in 2017-18, increasing to 3 per cent over the forward estimates
• Employment growth forecast of 1 per cent in 2017-18 increasing to 1.5 percent in 2018-19
• Unemployment currently stands at 6.25 per cent and is projected to fall to 6 per cent in 2018-19
• Queensland’s population is continuing to grow at a rate of 1.25 per cent
• Queensland will raise $2,691 per person in state-based taxes in 2017-18, compared with an average of $3,534 in other states.

FURTHER READING

• Budget Papers
• Budget Speech
• Media Releases

MAJOR SAVINGS MEASURES

• $197 million over the next five years from the implementation of more effective and efficient revenue management services
• $88 million over the next four years from a new 1.5 per cent land tax surcharge on absentee land tax payers if the value of their taxable land is $350,000 or higher

The 2017-18 State Budget allocates significant funding towards roads, transport and economic growth projects in the regions. Key initiatives include:

• $1.95 billion additional funding for Brisbane’s Cross River Rail project
• $386 million to diversify North Queensland’s energy supply
• $120 million for the Trinity Inlet dredging plan in Cairns
• $75 million for channel widening at the Port of Townsville
• $27.5 million to expand the Back to Work employment program into South East Queensland
• $15 million to upgrade the Whitsunday airport runway
• $15 million to develop 10-year Priority Industry Roadmaps and action plans for emerging and priority sectors