Queensland Business Outlook: 2017 Budget Edition

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Builders, battlers, bottom line? Business confidence making a comeback in Queensland’s 2017-18 budget

Queensland Business Outlook

  • $42.75bn capital works program over four years supporting 40,000 jobs in ‘17/18
  • Cross river rail fully funded by Qld Govt total $5.409 bn (1500 jobs p.a.)
  • $4.8bn in 2017 across regional Queensland supporting 14,500 jobs
  • Health investment $16.6bn, education $13.7bn, $5bn cost of living concessions package.

13 June 2017: Queensland’s 2017-18 budget brought down by Treasurer Curtis Pitt today was clearly aimed at boosting business confidence and injecting much needed funds into creating jobs.

Deloitte Access Economics partner Natasha Doherty said: “in our view this ‘builders, battlers and bottom line’ Palaszczuk Government budget aims to boost business confidence while looking after the disadvantaged or battlers in Queensland.

“In terms of builders, it is good to see the debate over who will fund the Cross-River Rail project finally settled. The Palaszczuk Government announced it will fully fund this project for the state to a total $5.409bn, although leaving the door wide open to any forthcoming funds from the Federal Government. This capital works investment is projected to create 1,500 jobs in Queensland each year of construction.

“The $770m additional cost-of-living concessions this year is part of an overall $5bn concessional budget package, adding to the $1.8bn housing strategy which is clearly aimed at supporting Queensland’s battlers.

“And when considering the bottom line; this 2017/2018 budget is adequately conservative, with the Palaszczuk Government intent on delivering a surplus while remaining fair,” Doherty concluded.

Job creation: “There will be some job creation out of this budget but whether it meets the magic number of 40,000 jobs this 2017/2018 year – time will tell,” said Doherty.

Where we have come from: Queensland’s State Final Demand grew by 0.4% in the March quarter to be 1.8% higher over the year, which is a solid improvement over previous quarters of performance. But the economy and the State’s financial position took a $1.1 billion hit to the bottom line from Cyclone Debbie and the cost of recovery, including an impact on the economy is likely to exceed $2bn.

Top line numbers:

  • $2 billion for Cross River Rail
  • $16 billion for health
    • $68 million to replace Barrett Centre and expand mental health services
  • $13 billion for education
    • $500 million for two new schools
    • Expand West End State School
    • Buy land for four more regional high schools
  • $1.8 billion for the housing strategy over 10 years
  • $1.1 billion for electricity projects and subsidies
  • $770 million to pay for the Solar Bonus Scheme.

The state’s key tax revenue has also been revised down by $258m in 2017-18.  Across the forward estimates, this modest operating surplus position is expected to continue in line with a reduced coal price outlook and increased government spending.

Health

The real challenge that will emerge this year is how to fund the growth in health expenditure. Managing the Health and Hospital Service budgets will be critical. There are a variety of investments within health to support delivery of services, including:

  • An additional $56.7m of the continued roll out of the electronic medical records program
  • $208.4m for upgrades to Kingaroy, Blackhall and Sarina hospitals, the redevelopment of the breast screen clinic at Townsville Hospital, the refurbishment of the emergency department and specialist outpatient facilities at Maryborough, and mental health unit in Cairns
  • $122.8m to enhance public hospital capacity in South East Queensland including the emergency Department in Caboolture
  • $68.2m for a new adolescent extended mental health facility.
Education

On top of the $500 million Building Future Schools Fund, the government is funding a number of new initiatives in the education portfolio including:

  • $56.9m to maintain senior secondary curriculum offerings for students
  • $150m for Advancing Teaching and Learning for teacher attraction, quality and leadership, as well as staff capability in response to the disability review.
Housing and public works

As part of the Queensland Housing Strategy the government will commit $121.5m to support service delivery reform, including programs such as the youth foyer models and housing support programs. In addition $75m is allocated to progress home ownership in discrete Aboriginal and Torres Strait Islander communities

Justice

The largest investment in Justice is the Parole Reforms. The government has committed $249m to overhaul the parole system. Additions to this investment are:

  • $169.2m for the transition of 17 year olds from the Queensland adult justice system
  • $35.1m for the specialist Domestic and Family Violence court in Southport, as well as a roll out in Beenleigh and Townsville
  • $22.2m for the reintroduction of the Drug Court
  • $26.2m for implementing recommendations from the Review of Youth Detention in Queensland

Doherty concludes: “This portfolio investment is a typical Labor budget reflecting a focus on social issues and inequity. It is an investment in addressing complex problems and aimed at reducing costs into the future. The question is will it be enough to turn the dial on systemic problems?”

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