The Queensland Government has released its COVID-19 Fiscal and Economic Review. The review replaces the Government’s annual budget and is intended to reflect the impact of COVID-19 on the Queensland economy.
While the Property Council welcomes the extension of land tax rebates- the full details of which are yet to be released- this mini-budget reinforces the scale of the economic challenge the State is facing, and is a missed opportunity to unlock private sector investment to fuel the State’s economic recovery.
- $8.1 billion deficit
- Total debt exceeds $100 billion
- 9 per cent unemployment expected by December
- Forecast 2.5 per cent fall in GSP for calendar year 2020, followed by a 3.75 per cent increase in 2021
- Population growth expected to slow to 0.75 per cent 2020-21
- Stamp duty revised down from $3.2 billion to $2.5 billion
- $249m extension of land tax and payroll relief
- $1 billion direct investment in business
- Confirmed $51.8 billion infrastructure investment over four years, with $13.9 billion in 2020-21
- ‘Savings and debt’ plan to target $3 billion in savings over four years
- $7 billion previously committed through the Economic Recovery Plan
- $1.2 billion Health Package
- $950m payroll tax relief
- $1 billion Jobs Support Loan Scheme
- $196m Small Business Adaption Grants
- $400m land tax relief
- $1.5 billion support for large and regionally significant businesses
- $400m in household bill relief
Extension of land tax and payroll tax relief measures
The Government has allocated $249 million to extend current land tax and payroll land tax relief measures. This extension is expected to amount to a 25 per cent land tax reduction for 2020-21. However, the full details are yet to be confirmed. Once available, members will be advised via a further alert.
The Property Council has been strongly advocating for an extension of the Government’s land tax relief measures and welcomes today’s announcement.
$1 billion direct investment in business through two new funds
Backing Queensland Business Investment Fund
- $500m fund dedicated to direct investment in Queensland business and industry
- Aims to support businesses that need capital to create jobs
- Managed by QIC
- Will consider taking ownership of previously privatised assets
- Can partner with super funds and other financial institutions
- Targets investment in businesses that:
- are small and medium businesses
- will create Queensland-based jobs
- have a proven product and defined market opportunity
- are relatively mature
- seeking capital to expand or restructure, enter new markets or finance significant acquisition; and
- have well established and reputable owners.
Renewable Energy Fund
- $500m fund
- Aims to increase public ownership of commercial renewable projects and supporting infrastructure
- Used to support Government-owned energy corporations
The Property Council has raised concerns with the announcement of these two $500 million funds, which would see Government competing with private capital.
A more effective approach to generating economic activity would involve revising the tax and regulatory settings that deter private enterprise from investing in Queensland. The Property Council is committed to advocating for policies that unlock private investment in our 2020 Queensland Election Strategy.
The Government has also announced the restructuring of several Government agencies:
- The Queensland Productivity Commission (QPC) will be integrated into Queensland Treasury
- Building Queensland will also be integrated into Treasury.
The Property Council has raised concerns that integrating Building Queensland and the Queensland Productivity Commission into Queensland Treasury will limit their ability to provide frank and honest economic advice to the Government.
As part of our 2020 Queensland Election platform, the Property Council is committed to advocating for a range of policy proposals designed to unlock and leverage private sector investment as a key part of the State’s economic recovery.
Ideas such as the removal of the foreign investor surcharges, a reduction of land tax for Build-to-Rent developments, the removal of stamp duty for off-the-plan dwellings, or simple measures such as reducing strata title termination thresholds, would assist in stimulating new private sector activity, rather than competing with it.