As far as putting shovels in the ground, no other Queensland budget has dug deeper.
“This budget commits our government to the biggest building program in our state’s history,” declared state Treasurer Cameron Dick as he delivered the 2023-24 Queensland budget.
“Our government will deliver more hospitals, more houses, more roads, more trains and more schools.”
Overall, it adds up to an $89-billion four-year capital program it is dubbing the Big Build—including $20.32 billion of additional investment in its latest budget allocation.
Cost-of-living relief is the budget’s centrepiece, with a $1.6-billion slew of new and expanded initiatives—including electricity rebates and free kindergarten for all eligible-aged children—to help combat the impact of rising interest rates and inflation.
But it is the record building program, with some of the state’s biggest transformational projects, that is laying the the foundations the state will need to cater for its ongoing and future growth.
“We can deliver our state’s biggest cost of living program our state’s biggest building program and deliver lower debt because of one simple reason—progressive coal royalties,” the Treasurer said.
And with a pile of chips in front of it from a $15.3-billion windfall in coal royalties, the government has gone all in with what it is touting will be Queensland’s biggest decade of infrastructure investment.
Meanwhile, times are as tough as they get in the development and construction sector with prevailing cost escalation and a crippling skilled labour shortage—all of which has been factored into the budget equation.
“Anyone who pretends governments are immune from the rapid rise in construction costs that has affected the entire industry in Australia is economically naive or seeks to deceive Queenslanders,” Dick said.
Using the coal royalties that have pumped up the state’s coffers, the government plans not only to meet those extra construction costs to deliver its building program but also a $12.3-billion budget surplus—the largest recorded by any state or territory government.
“Our capital program is putting in place the infrastructure we need, where we need it, to support that growth, right across the state.
“Queensland’s biggest decade of infrastructure investment is set to transform the state creating more jobs, new industries, better communities and stronger regions.”
No complaints about that from Scott Hutchinson, the chairman of Australia’s largest private construction company Brisbane-based Hutchinson Builders.
“Things that have to get built will get built,” he said. “We’ve got the [2032 Brisbane] Olympics and we’ve got to get this stuff done … and they will get it done.
“They’re not trying to pump prime the industry. They understand the industry and that we’re at capacity and they’re working with it.
“Prices have already gone up 20 per cent to 30 per cent and are still rising 1 per cent one or 2 per cent a month … so the private work is just going to fall off anyway because construction is too expensive at the moment and nothing stacks up.”
The budget’s big spend on building is focused on transport, education, energy and housing—with the latter front and centre, given the state’s dire housing supply and affordability issues.
According to RPM’s latest south-east Queensland market update, the region’s residential vacancy rate remains acute at under 1 per cent and has a shortfall of 25,000 rental properties that is forecast to worsen as overseas migration increases.
“Understandably, this housing shortage is an issue of great concern to many Queenslanders,” Dick said in his budget speech. “Every Queenslander deserves to have a home.”
As part of its budget initiatives, the government is providing increased funding of $1.1 billion for the delivery and supply of social housing. Doubling its Housing Investment Fund to $2 billion, it has a target to support commencements of 5600 social and affordable homes by 30 June 2027.
An additional $322 million has been allocated to fast-track another 500 homes by 2025. As well, the government will provide built-to-rent tax concessions for developments that provide at least 10 per cent affordable dwellings at discounted rents.
But the initiatves are “nowhere near enough”—calling into question the government’s commitment to putting a roof over the head of every Queenslander, according to Queensland Council of Social Services chief executive Aimee McVeigh.
“The Queensland government has been building social and affordable housing at a glacial pace,” she said. “It has been spending less than any other states per capita on social housing.
“We need at least 2700 extra social homes annually, and more than 6000 social and affordable new homes each year across Queensland, on top of what has already been promised.”
Real Estate Institute of Queensland chief executive Antonia Mercorella agreed.
She said while the budget will temper escalating cost-of-living demands with some much-needed support “the elephant in the room remains around how Queensland will adequately boost its housing supply”.
“Sadly, there are no incentives to meaningfully boost supply and increase the current rate of build, while we face a continued shortfall and a 50,000-waitlist growing longer by the day.”
Mercorella said the budget also had missed a valuable opportunity to reform property tax.
“Stamp duty significantly hinders home ownership, discourages housing turnover, and restricts mobility, and it’s abolishment would open doors in Queensland for many,” she said.
“The windfall from coal royalties gave the government the opportunity to scrap stamp duty and move to a long-term, broad-based land tax.
“Taxes from property have doubled over the last decade, hitting property investors who provide the vast majority of housing for Queenslanders who rent their homes.”
The budget’s big ticket infrastructure items include $19 million over the next four years to support the Queensland Energy and Jobs Plan, including new wind and solar farms, large-scale batteries and transmission.
It includes $14 billion—comprising $6 billion in equity funding in the budget and the rest from the state-owned Queensland Hydro—to deliver one of Australia’s most expensive renewable energy projects, the Borumba pumped hydro project, west of Gympie.
The project is one of two pumped hydro projects that will provide 7 gigawatts of 24-hour storage with a view to replacing the state’s five coal-fired power stations by 2035. The other is the Pioneer-Burdekin pumped hydro project, west of Mackay, which will be the largest pumped hydro energy storage in the world.
About $9.8 billion also is to be invested over six years to build new or expanded hospitals across the state including in Cairns, Townsville, Mackay, Bundaberg, Hervey Bay, Toowoomba and in south-east Queensland.
The budgeted $6.9 billion for transport infrastructure next financial year includes $420 million for stage one of the Coomera Connector north-south corridor, $260 million towards stage three of the Gold Coast light rail as well as major upgrades to the M1 and the Bruce Highway.
With planning for the 2032 Brisbane Olympics under way, the budget also provides $1.9 billion over the next four years to commence delivery of venue infrastructure.
More than $1.2 billion has been set aside for skills and training initiatives supporting workforce development.
As well, $968 million in funding is to be used to establish a rolling land fund for the strategic acquisition of new school sites for existing Queensland State schools. In the budget $358 million is allocated for new general and specialist learning spaces.
Of the $20.32 billion capital program in the 2023-24 budget, $13.3 billion, or 65.5 per cent, will be invested in infrastructure projects outside the Greater Brisbane region.
“One of the cornerstones of this budget is the revenue generated by the coal owned by the people of Queensland,” Dick said. “That revenue was generated in regional Queensland. So it is only right that regional Queensland stands to benefit from what that revenue provides.
“Much of that investment will deliver the generational transformation that is the Queensland Energy and Jobs Plan. That is a plan that will revolutionise the Queensland economy and it will do so in regional Queensland.”
Handing down the budget, he said the challenges ahead for Queensland were still significant.
“We face tough economic headwinds, the highest inflation in a generation, the continuing war in Europe and high interest rates.
“But our actions 12 months ago to put in place progressive coal royalties, is the decision that sets up our state to take on those challenges.”
And with another 500 days to go before Queensland goes to the polls, those royalties will provide the Palaszczuk government with more powder in the keg for next year’s pre-election budget.
Article source: Queensland Property Investor
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