A building industry lobby group in Queensland has criticised the state’s budget despite a projected capital spend of $14.7 billion, saying that the budget fails to deliver a clear pipeline of work and that the industry is being hampered by red tape requirements on public sector projects.
Released on Tuesday, the Queensland State Budget for 2021/22 shows that the state expects to record a deficit of $3.49 billion in 2021/22 – slightly lower compared with the $3.803 billion recorded in 2020/21.
The state’s debt is expected to grow from $15.8 billion as at June 30, 2021 to $24.8 billion by June next year and to reach $42.6 billion by June 2025.
For the building sector, a significant positive can be seen through a healthy spend on capital works, which will increase from $13.9 billion in 2020/21 to $14.7 billion in 2021/22 and will total $52.2 billion over four years.
- $27.5 billion over four years in road projects, including major upgrades to the Bruce Highway.
- Establishment of a $2 billion Hospital Building Fund.
- $1.9 billion over four years to increase social housing supply and upgrade existing housing stock.
- More than $900 million to build 10 new primary schools in high growth areas and $500 million for additional and renewed infrastructure across existing schools.
Treasurer and Minister for Investment Cameron Dick said the state was able to invest in jobs as it had been successful in its health response to the pandemic.
“If you protect the health of your people then jobs will grow,” Dick said.
“It’s only because we got our health response right here in Queensland that our economy can now grow with confidence, and this is a budget that invests in that growth.
“We are building new hospitals, schools, roads and stadiums, because we are in one of the strongest financial position of any major government in Australia.
“This is a budget that leverages our state’s strengths to develop new capabilities that will get business and industry firing to create more jobs for Queenslanders.”
However, the budget has receive a cautious response from builders.
In a statement, Master Builders Association Deputy CEO Paul Bidwell welcomed the capital spend but cautioned that the industry still does not have a clear pipeline of public sector work.
Moreover, Bidwell has criticised the government’s insistence on persisting with its Best Practice for Major Government Projects principles approach toward procurement in major project delivery.
Introduced in 2018, this requires contractors bidding for work on major public projects ($100 million or more) to provide extensive information on matters such as workplace safety plans and history, workplace relations plans and history, experience and capability, commitment to and experience in local participation, program delivery methodology, compliance history and other matters.
Whilst the principles are designed to help ensure that procurement processes deliver best possible outcomes in aforementioned areas, Bidwell says the requirements impose an undue burden of red tape.
“With the commercial sector continuing to languish, the Palaszczuk government’s commitment to invest $14.7 billion in 2021-22 on capital works projects including over $1 billion on 10 new schools, plus hundreds of millions upgrading existing schools, is a welcome relief – but as was the case with last year’s budget, builders remain without a clear picture of the pipeline of work over the coming years,” Bidwell said.
“However, the government seems insistent on sticking with its so-called Best Practice Principles for major government projects, despite the growing chorus of protest around Queensland taxpayers forking out at least 30 per cent more, no matter whether they’re in regional or metropolitan areas.”
Away from the budget, Bidwell also criticised the Queensland Government’s support for the introduction of mandatory accessibility provisions into the National Construction Code – a move he says will add an extra $8,000 average cost of delivering new homes.
Still, the budget received a positive reception from the Property Council of Australia, who welcomed the commitments on social housing as a necessary step to helping ensure that new housing supply keeps pace with population demands.