The 2023-24 Queensland State Budget was handed down by Treasurer, Cameron Dick, on Tuesday 13 June 2023.
Owing to significantly higher coal royalties hitting the state’s revenue, the Treasurer announced a budget surplus of $12.3 billion for the 2022-23 financial year. This is the largest budget surplus ever recorded by any state or territory government. Remarkably, only four times has the Federal Budget seen a greater surplus than Queensland’s 2022-23 budget surplus.
Following strong growth of 4.4% in 2021–22, the Queensland economy is forecast to grow by a further 2% in 2022–23 and strengthen to 3% growth in both 2023–24 and 2024–25 financial years.
Not surprisingly in the current economic environment, with inflation hitting Queenslanders hard in the hip pocket, the Queensland Government has responded with a $1.6 billion cost-of-living investment in this budget.
In addition, the government is continuing to look toward its investment in key infrastructure with a forecast capital investment of $89 billion over four years. As Queensland moves to within 10 years of hosting the 2023 Olympic and Paralympic Games, this infrastructure commitment includes spending of $1.9 billion over four years to commence delivery of venues infrastructure for the games.
A further $19 billion has been set aside for capital investment into renewable energy covering wind, solar, storage and transmission.
These investments are forecast to see the state budget fall back into deficit in the 2023-24 financial year and returning to surplus for the forward estimates thereafter.
A summary of the key budget measures is provided below:
Cost-of-Living Support
$1.6 billion has been set aside in the 2023-24 year, to assist families and businesses with pressures from rising inflation. The concessions announced include:
- $550 Cost of Living Rebate on electricity bills to all Queensland households.
- $700 Cost of Living Rebate on electricity bills for vulnerable households, in addition to the existing $372 under the Queensland Electricity Rebate Scheme, bringing total rebates for this group to $1,072.
- $650 rebate on electricity bills for around 205,000 eligible small businesses, cutting the cost of doing business in Queensland.
- $645 million over four years, for 15 hours per week of free Kindy, for all four-year-olds.
Housing Affordability
With Queenslanders among the hardest hit by housing affordability pressures in the current market, the government has announced the following investments targeted at ensuring residents have a roof over their head:
- $1.1 billion in increased funding to drive social housing delivery and supply.
- Over $250 million for housing and homeless support services.
- Build-to-rent tax concessions for eligible developments providing affordable dwellings at discounted rents (discussed in further detail below).
- Doubling the Housing Investment Fund to $2 billion, to support commencements of 5,600 social and affordable homes by 30 June 2027.
Regional Infrastructure
With the boon in coal royalty revenue and the regional nature of the source of that revenue, the Queensland government has committed to giving back to the regions with a capital investment of $13.3 billion in 2023-24 for infrastructure projects outside of Brisbane. This is expected to support around 38,500 jobs in the regions.
In addition, $6 billion of funding, on top of an existing $4 billion commitment, has been set aside to fund Government-owned corporations for priority regional infrastructure projects, including energy, water and ports.
This includes:
- $1.06 billion towards CopperString 2032, which will support the construction of the 1,100‑kilometre transmission line from Townsville to Mount Isa.
- $7 billion for state-owned, large scale, long-duration pumped hydro, including $6 billion for the Borumba project over the construction period and $1 billion for the Pioneer-Burdekin project.
- $550 million towards the Fitzroy to Gladstone water pipeline, enabling long-term water security to the region.
- $500 million for CleanCo to support a 2.3-gigawatt portfolio of wind and solar projects in Central Queensland.
- $440 million towards Sunwater’s Burdekin Falls Dam Improvement and Raising Project, improving and raising the dam by 2 metres to further support water security, noting this is on top of the existing $100 million commitment towards the project.
- $300 million for CS Energy to pursue investments in new wind projects and energy firming options to support future industrial decarbonisation in Central Queensland.
- $100 million for Gladstone Port Corporation’s Northern Land Expansion project, subject to approvals, supporting the release of additional land at Gladstone Port and the development of renewable energy and other industries.
- $50 million for the replacement of North Queensland Bulk Ports’ Bowen Wharf, with the plans, designs and approvals subject to further consultation with stakeholders.
Drought Assistance
The following measures were announced in respect of the government’s support of primary producers in drought affected areas. To be provided in 2023-24 is:
- Relief of up to $910,000 through the waiver of fees associated with an annual water licence invoice and applications for stock or domestic water licences.
- Relief of up to $3.2 million through rent rebates for primary production leases.
- Funding of up to $5 million to provide relief to farmers and irrigators from fixed charges for electricity that are used to pump water for farm or irrigation purposes during periods of drought.
State Tax Measures
The following state tax measures were announced in the state budget:
Queensland Revenue Office (QRO) Compliance Work
Additional funding of $24.4 million over four years for the QRO to increase compliance work across state taxes. The budget forecasts this to result in an additional revenue of $224.8 million over the same period.
Debt Recovery and Compliance Program
dditional funding of $49.4 million over three years and $16.9 million per annum thereafter to the QRO to retain the QRO’s capacity to deliver increased debt recovery and compliance measures for unpaid state taxes. The budget forecasts this to generate revenue of $385.2 million over the three years.
Build to Rent Tax Concessions
From 1 July 2023, tax concessions will be offered for eligible Build to Rent developments that provide at least 10% of dwellings as affordable homes at discounted rents. This is forecast to cost the budget $15.5 million over four years.
However, it is proposed that tax concessions continue to be offered up to 30 June 2050 for eligible Build to Rent developments that become operational between 1 July 2023 and 30 June 2030. The substance of these concessions had already been announced by the government and, as announced, relate to land tax and stamp duty concessions as follows:
- a reduction in land tax of up to 50% for up to 20 years for eligible build to rent developments which feature at least 10% of rental homes as affordable housing
- a full exemption for the 2% foreign investor land tax surcharge for up to 20 years, and
- a full exemption from Additional Foreign Acquirer Duty (AFAD) for the future transfer of eligible build to rent development sites.
Eligibility criteria for these concessions have yet to be announced and, we understand, are subject to ongoing consultation by Queensland Treasury.
50% Payroll Tax Rebate for Apprentices and Trainees
The budget announced an extension of the previously implemented 50% payroll tax rebate on the exempt wages of apprentices and trainees until 30 June 2024.
Regional Payroll Tax Discount
The budget announced an extension of the 1% discount on the payroll tax rate for eligible regional employers until 30 June 2030 to provide ongoing certainty to regional businesses. This is forecast to result in relief to eligible businesses of $505.4 million over the four year forward estimates.
General Practitioner Payroll Tax Amnesty
As previously announced by the government, the budget incorporates the forecast cost of an Amnesty the government is offering to qualifying medical practices who may otherwise have an historical payroll tax liability for payments made to contracted GPs.
The amnesty applies up to 30 June 2025 and the budget has forecast it will cost $100 million per annum over the 2022-23 to 2024-25 years in lost payroll tax revenue. The amnesty has resulted from the fallout of recent litigation under the New South Wales Payroll Tax legislation and, following which, the QRO issued a payroll tax ruling which outlined the QRO’s views around how payroll tax applies to medical practices. The QRO’s views are in some cases contrary to conventional positions historically adopted by medical practices which, if those views are correct at law, exposes those practices to additional payroll tax liabilities.
While the amnesty extends to 30 June 2025, under the processes put in place for access to the amnesty, eligible medical practices must lodge an Expression of Interest form with the QRO by 29 September 2023.
Eligible practices should seriously consider the merits of lodging an EOI by the required date. Given ongoing litigation is happening in relation to payroll tax in similar settings across multiple Australian states, we strongly recommend that medical practices seek professional advice on their positions prior to 29 September 2023.