Queensland Budget dubbed ‘once in a generation’

Queensland Budget dubbed ‘once in a generation’

Posted on Tuesday, September 11 2012 at 4:31 PM

Regaining Queensland’s AAA-credit rating and returning the balance sheet to surplus sooner have defined the Newman Government’s first Budget.
Addressing the state’s Parliament today, Treasurer Tim Nicholls described it as “the most important budget in a generation”.

As reported yesterday, the government has
scrapped the $7000 First Home Owner Grant in favour of a new $15,000 First Home
Construction Grant.

Real Estate Institute of Queensland (REIQ)
chief executive Anton Kardash says the measure, designed to spark activity in
the state’s struggling construction sector, is unlikely to work.

An analysis of official data shows only 24
per cent of first homebuyers bought a new home when the government offered
$21,000 grants for new builds during the global financial crisis, Kardash says.

“The main reason for this is new homes are
usually too expensive for first-time buyers and located in outlying suburbs
where young people don’t necessarily want to live.

“New units and townhouses can also be more
expensive than established (properties) and often have higher body corporate
fees than older apartments.”

Master Builders Queensland applauded the
measure, which it says will boost “disappointing” housing approval figures plaguing
much of the state.

The top stamp duty threshold for properties
will increase to $1 million, but so too will the rate – to 5.75 per cent.

Nicholls outlined a range of other
cost-cutting measures, including the confirmed retrenchment of 14,000 public sector
employees across every government department.

The move is expected to cost $800 million
in redundancy payouts and provide long-term savings, and the final figure is
less than the originally flagged 20,000 jobs Premier Campbell Newman claimed
the state could not afford.

“We acknowledge this has been a difficult
and challenging time for many people, however we need the right sized public
service that provides services to Queenslanders at a price they’re prepared to
pay,” he said.

The government will increase coal mining
royalties, which is expected to pump an additional $1.6 billion a year into
treasury’s coffers.

The rate of royalties will rise by 12.5 per
cent for exports valued between $100 and $150 per tonne, and 15 per cent for
values over $150 per tonne.

Despite the timing of the jump, at a time
when commodity prices are sending jitters through the resources industry,
Nicholls says the industry will take certainty from his pledge to not increase
royalties for 10 years.

Included in the Budget were downgraded
economic growth projections – down to four per cent this year from the
previously forecast figure of five per cent.

Unemployment is also expected to pass six
per cent in the coming year – no doubt thanks in part to the impact of mass
public sector job cuts.

However Nicholls says the “tough decisions”
will see Queensland return to a slim surplus of $17 million in 2013-14.

There was some good news, in the form of
the $495 million Royalties to the Regions program that will focus on investment
in infrastructure.

Nicholls also outlined funding for research
to boost the state’s agricultural industry and allocated money to boost tourism

Funds were also put towards the 2018
Commonwealth Games on the Gold Coast.

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