The Queensland Government has handed down its full 2020/21 Budget today. Treasurer Cameron Dick said that this would be a no-surprises budget, and on that count, he has delivered. Barely anything in this budget has not already been announced in earlier documents or on the campaign trail just a month ago. There are reminders in here about the fragility of the Queensland economy and our place in the world, as well as the challenges presented by disasters and by changing global trading environments putting pressure not only on the bottom line but on the services vulnerable communities rely on from state governments.
The main takeaway from the budget is it's clear there is a lot this government wants to do in terms of helping people find a productive place in society, and it is willing to invest in that, but fear of critics of deficit spending have restrained their hand.
Headline Economic Figures
There is no doubt that COVID-19 has played quite a role in the state's economic performance. Gross state performance is down 0.4 in real terms, which is a very slight contraction of the state economy; overall, considering the conditions of the last year, a good result, but no doubt quite uneven.
The Employment rate for the year ending 2020-21 finishes at 6.4% on average. This year we started with a spike at 7.9%, which was under the forecasted 9% figure but will see the rate go to 7.5%. Long-term, the government is projecting an unemployment rate of around 6.5%, not dissimilar to before the COVID outbreak. Treasury notes that a high net migration rate complicates those figures to Queensland and an increase overall in Labour participation, expected to hit 66% this financial year.
Population growth in Queensland is expected to reach 1% on average this year, at the expense of NSW, which is expecting a net drop in its population.
The State's Budget Position
With a downturn in the economy and a significant hit to global export demand and tourist intakes, the government's revenue positions have significantly changed compared to the previous year.
Taxation revenue, expected to hit $15b in 2020 has fallen nearly $600m short of projections and will bottom out this year at $14.3b. The losses are associated with decreases in payroll tax receipts related to discounts offered by the government this year as well as the downturn.
Also contributing to losses in revenue is a drop in mining royalties, primarily from Coal and Petroleum industries, with almost $1b in expected revenues gone. GST revenue from the Federal government is also down significantly, with $2b wiped from the 18-19 financial year due to changes in the calculation and a drop in retail spending.
State Government revenue is projected to hit a low this year of $56.2b, the lowest figure since the 16-17 financial year.
Along with markedly decreased revenues, is increased expenses mostly associated with the COVID-19 response. Overall spending is forecast to be up to $1.3b compared to the previous year, a rise of 2.2%, Health, Employment, Education and Police leading the increases. The Public Sector itself will put on 6,000 new positions over the previous year, leading to a modest 3.2% increase in public sector wages.
Overall, the operating budget of the State government this year will be $64.9b.
Including $7b in borrowings for non-operational works, the cash deficit for this budget will hit $13.8b, up from the $6b final figure from the previous year. The future projections of all government & government-owned entities are now forecast to hit $130b by 2023/24.
Infrastructure Investments
While the government has focused on a "Business as Usual" approach to spending, the treasurer has committed to $14.3b of capital spending over the next budget period.
Key on the infrastructure spending list this year is the Cross River Rail project ($1.48b), Upgrades to the Bruce Highway ($717m), Upgrades to the Port of Townsville ($78m), the Building Better Hospitals Program ($131m), The New Public Transport Ticketing System ($68m), Rookwood Weir ($115m), Cairns Convention Centre ($84m), Karara Wind Farm ($42m).
There is also $1.6m set aside for the Satelite Hospitals program announced during the Campaign and $180m in Building new public housing stock and $114m in refurbishing existing Stock.
Regional Spends
In Brisbane and Redlands, Schools at Wilston, Gumdale, Aspley Victoria Point, Algester Pallara and Capalaba are all getting upgrade works. Train stations at Carsledine, Lindum, Cannon Hill and Birkdale are getting access, parking and facility upgrades.
The Archerfield Airport is getting a modernisation update as well as significant works to The Princess Alexandra, Redland and QEII hospitals as well as initial works on the Clevland Satelite Hospital. But the big-ticket item for the area is the Gabba Redevelopment program, seeing $26m of it's projected $35m project cost allocated this year.
In Logan, Schools at Springwood, Mabel Park Logan City, Marsden, Shailer Park Carbrook, Beenleigh, Mt Warren, Windaroo are all getting upgrades with planning for a new Primary School at North Maclean and Bahrs Scrub on the cards, as well as the first of the Hydrogen Training Center of Excellence and a pilot of the Community TAFE Learning centre at Yarrabilba.
A spend of $150k will be going into a replacement Fire and Rescue Station at Loganlea, and $2.7m into a new Fire and Rescue facility at Yarrabilba, and $1.3m for the Munruben Ambulance station project.
The critical project for the region is the Southwest pipeline, which will link Beaudesert to the South East Queensland Water Grid, a $95.2m Spend.
In Ipswich, Schools in Glamorgan Vale, Hatton Vale, Ipswich Central, Bellbird, Amberly, Woodcrest, Fernbrooke, and Springfield Central are getting upgrades. Springfield Central Rail station is getting a park and ride facility upgrade, and East Ipswich Train station Is also getting $17m of its $37.7m access and facility upgrades.
Ipswich Hospital and Inala Community Health Centre are getting upgrades worth $43.6m collectively this year, as well as initial works on the Ipswich City Sattelite Hospital.
The critical project for the region is the $654m Southern Queensland Correctional, precinct, which will open an extra 1,000 correctional places focused on rehabilitation, with $110m to be delivered this year.
On the Gold Coast, Schools at Ormeau Woods, Picnic Creek, Pacific Pines, Southport, Nerang, Miami, and Palm Beach are getting upgrades as well as $22.7m of $46m on a new special school in Coomera, and a $10m refit of the Robina TAFE and $18.8m refit of the Gold Coast TAFE Campuses.
The 3rd Stage fo the Gold Coast Light Rail will get $50m of it's $709m spend this year to link Broadbeach south and Burleigh Heads on the network. The commitment to build a new Heavy Rail station at Helensvale North is also on the cards; however, there is no funding in this budget round.
There is also a stack of M1 upgrade projects including the Yatla South exit upgrade, and the Exit 49 (Pimpama) and Exist 57 (Oxenford) upgrades getting a combined $29m this year.
The critical project for the area is also on the M1, a $145m of the $1b Pacific Motorway upgrade to 6-lanes between Varsity Lakes and Tugun.
On the Sunshine Coast, schools in Eumundi, Caloundra, Pummicestone, Deception Bay, Dayboro, Bray Park and Lawnton are all getting upgrades as well as $26m of the $68.2m allocated to the new primary school at Caloundra South.
Stage 1 of the Beerburrum to Nambour Rail upgrades will get $38.9m of its total $550m allocations along with funding from the Federal Government, as well as the commitment to upgrades to the Burpengary train station, with no money allocated yet.
Nambour, Sunshine Coast University, Caboolture, and Redcliffe hospitals are all getting upgrades, and the groundwork for the proposed Caboolture, Bribie Island and Hills District Satelite Hospitals.
The critical project for the area is the Bruce Highway and Maroochydore Road Interchange upgrade, which is receiving $91m of it's total $301.3m allocation to upgrade the critical entrance.