QUEENSLAND BUDGET 2020/21
The State Budget provides disappointing reading for Queensland’s property industry.
It represents yet another missed opportunity for our state to attract the private sector investment we desperately need to create new jobs and facilitate new revenue streams.
Throughout the election campaign and in the lead up to the Budget, the Property Council has been reminding Government of the importance of unlocking the capacity of the private sector to accelerate the state’s economic rebuild. And as the state’s biggest employer, the property industry has a key role to play in getting the economy back up and running.
Sadly, the message of stimulating private sector activity appears to have fallen on deaf ears.
The Budget provides a re-packaging of the Government’s ‘mini-budget’ handed down in September, along with a handful of commitments announced during October’s election campaign.
While Queensland’s biggest competitors- New South Wales and Victoria- have adopted big thinking and ambitious budgets that focus on infrastructure, tax incentives and major reforms, Queensland has chosen to go with more of the same.
The lack of action on Build to Rent is a prime example of a missed opportunity to attract job-generating investment into Queensland. New South Wales and Victoria have both halved land tax for these projects and removed foreign surcharges to attract institutional investment.
Put simply, a decision not to match these incentives in Queensland means we are letting southern states win the fight for job-generating investment.
These targeted incentives will create new revenue streams, while delivering much-needed construction jobs and quality rental accommodation. With Queensland set to be the beneficiary of unprecedented interstate migration, this is exactly the type of private sector projects we should be seeking to attract.
Our handling of the health crisis has put Queensland at an advantage over the other states in allowing us to get ahead in planning our economic rebuild. Sadly, instead of capitalizing on this advantage, the Budget has placed us squarely at the back of the pack when it comes to investment attraction.
Key Economic Data
COVID-19 RECOVERY
The 2020-21 budget provides funding for a range of Queensland Government COVID recovery initiatives. This includes over $7 billion as part of its Unite and Recover COVID stimulus measures and $4.3 billion for election commitments.
The budget also incorporates the Government’s land tax relief which was implemented to support landlords in providing rental relief for their tenants under Retail Shop Leases and Other Commercial Leases (COVID-19 Emergency Response) Regulation 2020.
An additional $200 million will be allocated to the Works for Queensland program which is aimed at supporting local governments outside South-East Queensland. This brings the total funding for Works for Queensland to $800 million.
The Budget also provides for the following previously announced measures:
$0m Backing Queensland Business Investment Fund
$0m Queensland Renewable Fund
Queensland Productivity Commission will be integrated into Queensland Treasury to establish the Office of Productivity and Red Tape Reduction (OPRTR).
TAXES
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The State Government has honoured its election commitment to not impose any new or increased taxes. This was a key feature of the Property Council’s State Election Campaign after the property industry being subjected to nine new or increased taxes over the past five years. Despite the economic conditions, the Budget papers show that land tax revenue will increase from $1.406 billion in 2019-20 to $1.493 billion in 2020-21, and then jump 8.3% to $1.617 billion in 2021-22. It should be noted that these figures have been revised down from the 2019-20 budget papers. Transfer duties have been revised down by 11.4% in 2020-21. Treasury is basing these estimates on less short-term activity in the non-residential sector, however, they are anticipating a pickup from 2022-23 onwards. |
INFRASTRUCTURE
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The budget provides for a $56 billion infrastructure program over the next four years. This contains an additional $4.2 billion from what was announced in the mid-year ‘mini-budget‘. In 2020-21 the Government will have a $14.8 billion capital program, up from the $13.9 billion announced earlier this year. The Queensland Government has previously pledged $200 million towards the Building Acceleration Fund to support the development of catalyst infrastructure. Despite the fund being significantly oversubscribed, funding does not appear to have increased. Transport
Health
Education
Manufacturing
Funds have also been allocated towards the CopperString 2.0 energy transmission project. |
HOUSING
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The Government has allocated $526.2 million in the 2020-21 budget for social housing. This funding will spread across capital purchases, grants to construct new social housing dwellings, upgrading existing properties and providing housing services. The budget reaffirms the Government’s commitment to the Build-to-Rent pilot project, however, the Property Council’s calls for further stimulus measures to unlock activity in this fledging asset class have not been included. |
REGIONAL ROUND UP
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Townsville The Government has allocated $739 million towards infrastructure in the Townsville region in this year’s budget. Key projects include:
Gold Coast A new manufacturing hub will be established on the Gold Coast to support local manufacturing jobs. One of the Government’s seven new satellite hospitals is set to be built on the Gold Coast in addition to a new 40 bed mental health-unit at Gold Coast University Hospital. The budget contains the following key infrastructure costings for the Gold Coast:
Sunshine Coast The budget contains the following key costings for the Sunshine Coast. The Sunshine Coast will benefit from the Government’s investment in several key projects along the Bruce Highway including:
In addition, the Government has also announced:
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