Queensland Budget 2017: What do we know so far?
State Budget fundamentals are a key determinant of business confidence.
CCIQ is calling on Treasurer Curtis Pitt’s third State Budget to be one that lifts business confidence. It must provide stable, consistent, fiscal and economic policy to ensure businesses continue to invest and employ in Queensland in this likely election year.
These days we never reach budget day and the Treasurer's speech without learning of a few key budget measures. Here's what we know already.
Economy and Budgetary Position
MYFER revenue and surplus projections are listed below, however are likely to be revised based on the impact of TC Debbie.
- Projected Revenue 2016-17 $55.0 billion
- Projected Surplus 2016-17 $2.0 billion
- Projected Revenue 2017-18 $55.6 billion
- Projected Surplus 2017-18 $1.1 billion
Although suffering a hit from TC Debbie, the Treasurer has signalled an operating surplus for 2016-17. Treasury are pitching the revised operating surplus to be around $500 million, down from $2 billion 2016-17. TC Debbie has also resulted in growth rate predictions to be revised down by 0.75 per cent. The impact from TC Debbie was broad, affecting coal exports, sugar crops, and tourism across Queensland.
The Queensland Public Service is expected to balloon this financial year, with around 6000 new FTEs to be hired taking public service jobs to a record high of 216,636 FTE’s up from 212, 630 in the December quarter. If the pre-budget announcement goes ahead, the Treasurer will contradict self-imposed fiscal principles, namely that the government ensures the public service does not exceed population growth, on average, over the forward estimates.
CCIQ has repeatedly cited its concerns over public service numbers, stating that it presents an unsustainable financial risk to the government over the medium term.
The Commonwealth Grants Commission has determined GST revenue will be $14.07 billion in 2016-17 and $14.96 in 2017-18. These values were reflected in the MYFER and will have no impact on surpluses.
The impact of TC Debbie is expected to lead to a reduction of 20 million tonnes in coal exports during 2016-17 – roughly 8 per cent of annual output.
MYFER projected coal royalties of $3 billion during 2016-17. The impact of TC Debbie could be as high as $250 million. However, coal prices rose sharply in the aftermath and will offset the loss. It might lead to lost royalties of $100 million during 2016-17. There should not be a major impact on 2017-18 budget projections.
- $770 million to pay Solar Bonus Scheme (over three years) aimed at subsidising power bills to partly offset a price rise.
- Return Swanbank E gas-fired power station to service.
- $386 million Powering North Queensland Plan aimed at ‘strengthening and diversifying’ North Queensland’s energy supply.
$500 million for schools:
- New high schools in Fortitude Valley and South Brisbane.
- Expand West End State School in inner-Brisbane.
- Buy land for four more regional high schools.
- $75 million for the Townsville Port expansion.
- $15 million for Whitsunday airport runway.
- $1.8 billion package to build more than 5,000 extra social/affordable homes under the new 10-year Queensland Housing Strategy.
No pre-budget announcements.
Initial Budget Feedback
CCIQ commends the Treasurer on his commitment to responsible economic management. We are pleased to see a forecast operating surplus, and urge the Treasurer effectively target the surplus to boost job creation and infrastructure investment, particularly throughout Queensland’s regions. We have cited serious concerns regarding Queensland public service figures, and we have called for an immediate reduction in electricity price rises for small businesses; an issue in which we believe the government could do more.
Small businesses, the lifeblood of Queensland’s economy now and into the future
The 2017-18 State Budget represents a perfect opportunity for the State Government to introduce measures to kick-start Queensland’s small business economy in a time of transition.
What Small Business Wants to See on Budget Day
We are calling on the State Government introduce five key measures as part of the 2017-18 State Budget that will immediately provide a boost to small businesses, thereby spurring economic activity across Queensland’s economy:
- Lift the payroll tax exemption threshold, which is a tax on employment and a penalty for giving someone a job;
- Improve regional employment outcomes by prioritising workforce skilling to get young people into jobs;
- Increase infrastructure investment to create jobs, boost apprenticeship numbers, and increase productivity;
- Introduce measures that will immediately reduce electricity price rises; and
- Introduce targeted programs to promote small business growth.