Queensland Budget 2019-20

11 June 2019

Queensland Deputy Premier and Treasurer Jackie Trad this afternoon delivered a “Budget for regional Queensland”, declaring “When our regions do well, all of Queensland does well”. The 2019-20 Queensland Budget is a sharp response focused on repairing the political damage done to Queensland Labor at the May federal election. The Budget also reinforces the Palaszczuk Government’s messages on job creation, cost of living relief and improved services in health and education.

The Budget papers reveal a larger than expected surplus of $841 million for the year-to-date, an improvement of $317 million since the Mid-Year Fiscal and Economic Review (MYFER). This is despite a fresh round of natural disasters, a decline in stamp duty receipts and lower GST revenue. The Treasurer also confirmed a pipeline of surpluses, with forecasts over the forward estimates of $189 million in 2019-20 and $313 million in 2020-21, rising to $483 million in 2021-22.

The Treasurer has confirmed a significant infrastructure pipeline of $49.5 billion over four years. Ms Trad sought to highlight the economic benefits of the infrastructure program, while saying it was reasonable to fund non-recurrent infrastructure against the State’s balance sheet. The Budget allocates $5.6 billion in 2019-20 for transport infrastructure, including continuation of construction work on Cross River Rail and major upgrades to the M1 Pacific Motorway and the Bruce Highway.

With the State’s total debt forecast to rise from $78.7 billion in 2019-20 to over $90 billion across the next four years, Ms Trad said debt levels remained “affordable” and that the general government debt-to-revenue level will remain lower than any other major state, apart from NSW.

To contain the State’s operating expenses in the public sector, a new office will be established within Treasury to target $200 million of savings in 2019-20; and $500 million savings in each following year. The Service Priority Review Office will be tasked with auditing public sector agencies and programs. The Government maintains its promise that there will be no forced redundancies.

In a boost for around 13,000 small and medium business, the Government has announced payroll tax relief measures worth approximately $885 million over four years. However, this will be partly offset by raising the rate for businesses with payroll greater than $6.5 million. Tax increases have also been announced for the LNG sector, where petroleum royalty rates will rise from 10 per cent to 12.5 per cent, and there will be increases in land tax – targeted at foreign and wealthy land owners.

Emphasising the Government’s ongoing focus on easing cost-of-living pressures for Queenslanders, an extra $76 million will be spent on an extensive range of concessions and rebates, taking the total spend to $5.7 billion.

In other key measures, the Budget confirms an extra $929 million will be spent in the Health portfolio this year, taking the total health budget to $19.2 billion, with the Treasurer promising more doctors, nurses, paramedics and new health infrastructure. In the education portfolio, the Budget allocates $14.9 billion in funding, which includes $100 million in new funding for air-conditioning in schools.

As foreshadowed in media reports, the Budget confirms the Government will freeze coal royalties for at least one year. The Treasurer has indicated that the freeze will be extended by a further two years if resource companies agree to voluntarily contribute $70 million towards a new infrastructure fund.

KEY PARAMETERS

• A net operating surplus of $841 million in 2018-19, easing to $189 million in 2019-20, before increasing to $313 million in 2020-21.
• Total debt of $71.3 billion in 2018-19, projected to increase to over $90 billion in 2022-23.
• Gross state product (GSP) growth of 2.75 per cent in 2018-19, increasing to 3 per cent in 2019-20 and easing back to 2.75 per cent annually from 2020-21.
• Employment growth of 1.5 per cent in 2018-19, decreasing to 1.25 per cent in 2019-20.
• Unemployment expected to remain flat at 6 per cent, before falling to 5.75 per cent in 2022-23.
• Queensland’s population growth projected to continue at 1.75 per cent annually.
• Queensland will raise $2,952 per person in state-based taxes in 2019-20, which is $666 per capita lower than the average of the other jurisdictions.

Read more here.