June 9, 2010There is a general consensus among industry groups that yesterday’s Budget handed down by Treasurer Andrew Fraser will help get the state’s finances back on track, yet some areas require a more focused policy response.
Queensland will record a $1.74 billion deficit in 2010-11 as a result of significant capital works funding aimed at strengthening a post-GFC economy.
Over the coming financial year, the Government will drive economic and jobs growth through a $17.1 billion capital works program which is expected to support 106,000 jobs.
It will also spend $7.3 billion on transport infrastructure – bringing forward key projects such as the Springfield rail line by two years.
‘PLATFORM FOR STRONGER GROWTH’: Ai GROUPThe
Australian Industry Group says yesterday’s economic growth forecast of 3.75 percent for 2010-11 is “encouraging”, and welcomes further investment into skills, infrastructure and innovation.
“This, together with the Queensland Government’s program of asset sales and recovering revenues, should put the State’s finances and the economy on a more even footing,” Queensland Director Chris Rodwell says.
However, Rodwell says a remaining “black spot” in the government’s response is its limited approach to containing recurrent spending, such as public sector wages.
“A more concerted effort would allow more scope to give cost relief to Queensland businesses,” he says.
“Increases in energy costs and workers compensation premiums, as well as the introduction of the waste levy, deserve a more focused policy response.”
Despite these concerns, the Ai Group says a number of policy decisions directly respond to its own recommendations, especially in the area of skills and innovation.
"The skills reform, involving the creation of the Skills Commission, is a watershed for the Queensland economy,” Rodwell says.
“It will allow industry to steer a significant portion of funding for skills to ensure investment better aligns with economic needs now, and into the future,” he says.
Ai Group has also given the thumbs up to the Bligh Government’s extension of the 125 percent tax rebate for apprentice-employing businesses for another year.
The $2.5 million pilot innovation vouchers program and $17.1 billion infrastructure spend are also welcome Budget highlights for the industry body.
PROPERTY COUNCIL GRADES BUDGET ‘PASS’The
Property Council of Australia has also completed its preliminary assessment of the Queensland State Budget against the industry’s priorities, and has agreed on a ‘pass’ mark.
Queensland Executive Director Steve Greenwood says the government’s commitment to infrastructure investment is what got it across the line in 2010-11.
“We are pleased that the Government has recognised the importance of infrastructure investment to the Queensland property and construction sector and has begun to align investment more closely with growth corridors as can be seen with the Springfield railway line announcement,” Greenwood says.
“However we are disappointed that the State has decided to continue the disproportionate tax load carried by the Queensland property industry,” he says.
In 2010-11 the property industry will reportedly contribute 37 percent of the State’s tax take - a total of $3.8 billion. This is up from 34 percent in 2008-09.
“To put this in perspective the Queensland Government is expecting to receive $3.2 billion in mining royalties over the next 12 months. So when compared to the much published mining industry, it is clear that the property sector really does the heavy lifting when it comes to tax in Queensland,” Greenwood says.
“The property industry will be paying 20 percent more to the State than the mining industry in 2010- 11,” he says.
Announcements associated with the Growth Management Summit also ensured the State Government got a positive response from the property industry, according to Greenwood.
“Obviously we are pleased that the Government has committed to take action on issues such as infrastructure charges and development assessment processes. However at this stage we are none the wiser as to how long we are expected to wait to see real outcomes and changes in these areas,” he says.
“In the context of growth management being the key issue facing Queensland at the moment, this budget gets a firm pass mark from the property industry.”
