Builders in Queensland remain unclear about the forward pipeline of public sector work despite the government in that state committing more than $56 billion in infrastructure investment over the next four years.

Releasing its budget for 2020/21, the Queensland Government confirmed its intention to spend $56.031 billion on infrastructure over four years including $14.835 billion in 2020/21.

In 2020.21, this includes spending of:

• $6.267 billion on transport projects such as Cross River Rail and ongoing upgrades to the M1 Pacific Motorway and the Bruce Highway.
• $1.625 billion to support delivery of health services including $265 million to build seven satellite hospitals to enable our acute hospitals to continue safely managing patients via alternative models of care across South East Queensland.
• $979 million under the Building Better Hospitals commitment to enhance capacity and services in the South-East Queensland growth corridor
• $1.917 billion in new schools, classrooms and facilities.
• $2.745 billion to upgrade and maintain energy and water assets
• $590.4 million in justice and public safety service infrastructure
• $562 million in social housing including capital purchases and grants to construct new dwellings, upgrade existing properties, and provide housing services, including in Indigenous communities.
• $2.218 billion in grants to local government for local infrastructure.

This, the government says, will support creation of around 46,000 jobs in 2020/21 including 28,700 jobs in areas outside of Greater Brisbane.

But the Master Builders Association of Queensland says the budget has left builders without a clear picture of the forward pipeline of work.

In a statement, Master Builders Association of Queensland Deputy CEO Paul Bidwell welcomed several aspects of the budget but says the budget has failed to deliver a clear picture of the pipeline of work.

This was especially the case with the commercial building sector, which he described as being ‘in a world of pain’.

“The government has earmarked significant investment in schools and hospitals across the state – and we just want to know exactly where that is going,” Bidwell said.

“The fact there are no new taxes to be introduced is a relief, and we support the plan to borrow to build, particularly given interest rates are historically low.

“However, despite the Treasurer’s optimistic outlook that jobs growth and interstate migration will bounce back, commercial builders are in a world of pain, as compared to the residential building sector.”

Bidwell encouraged the government to invest in public buildings and social housing.

“While the $56B capital works and infrastructure spend over the next four years is a welcome boost, the government must actually get on with spending this money, particularly on public buildings, and by further investing in social housing,” Bidwell said.

“These types of projects will deliver a more immediate impact on the economy, by putting more people to work right away, and delivering the housing and facilities the 86,000-plus interstate migrants expected to move to Queensland by 2024 will need.”

Whilst the government’s capital works program is broadly welcome, the budget papers show that efforts to reboot the economy will create longer term debt challenges.

In 2020/21, the government forecasts an operating deficit of $8.63 billion and an overall fiscal deficit including purchase of capital assets of $13.440 billion, with the budget not expected to return to balance at any stage over the four year estimates period.

As a result, debt will rise from $50.6 billion as at June 2020 (up from $34.6 billion as at June 2019) to $63.467 billion by June 2021 and 88.9 billion by June 2024.