Queensland 22-23 Budget Highlights

The Queensland Budget, delivered by Treasurer Cameron Dick today, has paired increases on coal royalties and payroll tax, with investments on new and expanded hospitals and mental health.

Economic Forecasts and Projections

The State's key economic metrics remain strong, according to the Budget.

Unemployment is expected to remain at between 4 per cent and 4.25 per cent, through to 2026.

Inflation is forecase to move to 2.5 per cent by 2023-24; though wage inflation will remain at 3.5 per cent through to 2026.

Fiscal Outlook

The Treasurer has said that Queensland is the first of the four larger States to deliver a surplus, with a $1.9 billion actual for 2021-22; despite a $1.4 billion deficit having been projected at the December 2021 Budget Update, and a $3.4 billion deficit was projected at the last Budget.

In a sign of improving government finances, Net General Governemnt Sector Debt was forecast by the 2020-21 Budget to reach $50.8 billion by 2023-24. It is now forecast to reach $39.2 billion in 2025-26.

The Key Fiscal Aggregates and Net Government Sector Debt Forecasts from Budget paper 2 are set out below.

Coal Royalties Increases

Three new tiers will be implemented from the new financial year, with the current 15 per cent maximum royalty rate to rise to:

• 20 per cent for prices above $175 per tonne.

• 30 per cent for prices above $225 per tonne.

• 40 per cent for prices above $300 per tonne.

The royalties increases are well above general industry expectation, and are likely to give rise to significant concerns around sovereign risk; as well as the ability of mines to manage harsh economic times with periods of high royalties, which are being enjoyed by the coal sector at present.

The Treasurer has said that all of the additional $1.2 billion raised from additional coal royalties across the forward estimates will be spent in regional Queensland.

According to the Queensland Resources Council the sector will be paying the highest royalties rates in the world, and companies will seriously reconsider future investment decisions.

Resources

The Queensland Resources Industry Development Plan, which aims to fast track new economy minerals production and processing, will include an additional $17.5 million over 4 years for exploration companies to enhance the Collaborative Exploration Initiative.

Hospitals and Mental Health Funding

• $9.785 billion will be spent on capital over the next 6 years and $6.784 billion over 4 years to support the ongoing growth in health and ambulance services to deliver an additonal 2,509 beds across Queensland.

Under the funding new hospitals will be built in Bundaberg, Toowoomba, Moranbah and at Coomera; while there will be hospital expansions in Cairns, Townsville, Robina, Mackay, Redcliffe, Ipswich and Hervey Bay.

The Princess Alexandra Hospital, the QEII Hospital, the Prince Charles Hospital and Logan Hospital will also be expanded.

In Brisbane a comprehensive Queensland Cancer Centre will be built at the Royal Brisbane and Women’s Hospital.

• $1.645 billion will be spent on mental health services over 5 years, support by an increase in payroll tax.

To support this measure a 0.25 per cent mental health levy will be imposed on businesses with annual taxable Australian wages of over $10 million from 1 January 2023. Businesses with annual wages over $100 million will pay an additional 0.5 per cent levy. The levy will raise $425 million across the forward estimates.

Renewable Energy Investments

Since 2015, 50 large-scale renewable energy projects have been committed, commenced, or constructed in Queensland. The projects will support 8,000 jobs and avoid 13.8 million tonnes of emissions annually.

$48 million over 2 years has been committed to advance early works on the Borumba Pumped Hydro Energy Storage project and will also support further investigation into other prospective pumped hydro storage sites across Queensland.