Treasurer Trad delivers maiden Budget
Yesterday Queensland Treasurer Jackie Trad handed down her first Budget and the Palaszczuk Labor Government’s first since last November’s state election.
Below is a summary of some of the key announcements that were outlined and how both major parties are seeking to frame the 2018/19 Budget.
State of the books
The Treasurer announced a higher than expected surplus for 2017-18 of $1.52 billion – more than $1 billion above forecast – fuelled largely by an increase in coal and LNG prices. Moreover, there is a projected surplus of $148 million for 2018-19. However expenses are forecast to increase for the coming 12 months with debt also projected to increase over the following four years, reaching a record $83 billion by 2021-22. That was despite Labor promising during the election it would have a debt reduction strategy.
The Treasurer has cited infrastructure as one of the highlights of her Budget with funding announcements for projects across Queensland including:
- Mackay Ring Road stage 1 - $497.4 million;
- Reef Rescue Package - $830 million;
- Rookwood Weir - $353 million;
- North Coast Line - $804 million;
- M1 upgrades - $2 billion;
- Brisbane Metro - $944 million;
- Gympie Bypass - $1 billion;
- Cross River Rail - $5.4 billion;
- Cunningham Highway upgrades - $400 million.
In total the infrastructure spend represents the largest in a state budget since the 2011 floods that devastated much of Queensland. The $45.8 billion worth of programs will be rolled out across four years with regional areas poised to receive 62 per cent of the funding.
A traditional electoral strength for Labor, health funding contained in the Budget came to a total of $18.3 billion. This includes the following key measures:
- Queensland Health operating funding - $17.3 billion;
- Upgrades to public hospitals over six years - $570 million;
- Increase to the number of nurses and midwives over four years – 3,500.
The Treasurer announced a record spend of $14.1 billion in education for 2018-19. Key measures announced as follows:
- Four new high schools, a new primary school and special school;
- Refurbishments for 48 existing state primary and secondary schools;
- 3,700 extra teachers over the next four years;
- Investment in future schools fund over seven years - $808 million.
Households and cost of living
Cost of living is a bread and butter issue that governments at all levels are constantly trying to address. The following announcements were outlined yesterday:
- Household concessions package - $5.6 billion ($200 million increase on last year);
- First Home Owner Grant – reduced from $20,000 to $15,000.
Four new ‘luxury taxes’, foreshadowed during last year’s election, were also detailed with the Budget forecasting them to rake in $163.3 million per year over the next three years.
- Luxury car tax;
- Increased stamp duty for foreign investors;
- A betting tax for agencies operating outside Queensland;
- New land tax category for 850 large land holdings, farms not included.
Paradoxically, both the Government and the Opposition are labelling it a typical ‘Labor Budget’. The Treasurer is boasting about increased spending across a range of portfolios, while LNP leader Deb Frecklington has slammed the four new taxes announced along with the projected levels of debt over the next four years.
The Premier is insisting that it is a ‘Budget for all Queenslanders’ that is providing crucial funding to areas that need it the most. Labor has bankrolled traditional electoral strengths such as education and health, while the pain of new taxes are unlikely to be felt by the bulk of Queenslanders. The Government is clearly attempting to emphasise the contrast between it and the LNP when it comes to funding public services.
With debt forecast to hit $83 billion in 2021-22, the Government is facing criticism from the Opposition over the future of the state’s credit rating. Labor claims that the debt is sustainable while the LNP argues it makes regaining Queensland’s AAA credit rating impossible. The LNP and conservative commentators have also been quick to point out the irony that the Treasurer – who is seen as hostile to the mining industry – has relied on massive coal royalties to achieve her bigger than anticipated Budget surplus.
All-in-all it’s a Budget that seems to play into the usual attack lines that are exchanged by the two major parties. Labor claims to be the one most trusted to finance essential services while the LNP argues only it can manage debt and deficit.
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