The 2018/19 Queensland Budget falls short when it comes to long-term economic management, according to the Property Council of Australia.
The headline outcome of this budget is that despite a royalties’ windfall, dramatic tax increases, and positive economic outlook, expenditure levels will result in higher total State debt into the future.
Property Council Queensland Executive Director, Chris Mountford, says the budget reaffirms that the state has a structural fiscal problem which is not going away until meaningful reform – including asset leasing – is tackled.
“The Government is receiving solid mining royalties, ratcheting up property and other taxes, and budgeting for strong economic growth, but debt is set to continue growing into the forward estimates,” Mr Mountford said.
“Quick tax grabs are not a substitute for the long-term economic and tax reform that Queensland requires. They just push us further down list in the global battle for job generating investment.
“By way of example, next year the State is banking on an 11% increase in land tax revenue off the back of its previously announced increase to the highest threshold by 25% and bracket creep.
“Land tax thresholds in Queensland have not been reviewed for a decade. And now Queensland’s rates are far higher than NSW and Victoria. Surely this is cause for meaningful review and reform?”
“The tax increases locked in by the budget will increase the cost of housing for Queenslanders, increase rents for Queensland businesses, and reduce the amount of offshore investment in the state, which will ultimately translate to fewer jobs for Queenslanders.”
“While new infrastructure investment contained in the Budget is welcome, we do need be concerned about how it is being paid for. A more coherent long-term approach is needed to achieve enduring business confidence in Queensland.”
“This budget makes it clear that Queensland has a fiscal problem that won’t be fixed until there is the courage to tackle meaningful tax reform, and revisit the issue of asset leasing.
“Unless reform is undertaken, industry will be ever fearful of the next tax slug required to plug a short-term political need.