Queensland State Budget 2017-18

14 June 2017

Leisa Rafter , Partner, Tax |

Looming election, coal and Cross River Rail make the 2017 Queensland State Budget, a safe and sound one. Labelled as a fairly clever pre-election budget, the clear winner was the building and construction industry with a number of sectors such as health, tourism and education also benefiting.

“The budget had a balance of community and regional measures with prudent spending.”

Having considered all areas mentioned today, BDO has prepared a short summary of insights.

Major tax implications from 2017 Queensland State Budget

  1. 1.5% land tax surcharge for absentee payers of land tax. The surcharge will apply to land holdings with a taxable value of $350,000 or more and be in addition to the current land tax payable. It is not clear whether this will be limited to residential land as it is in other Australian States.
  2. First home owners grant increase to $20,000 for newly constructed homes or apartments has been extended for a further 6 months to 31 December 2017 at which time it will drop back to $15,000.
  3. Office of State Revenue Transformation Program is estimated to increase government revenue of $197 million over the next 5 years. Costing for the program is approximately $67 million.
  4. The Government has announced a 3.5% increase to vehicle registration duty, effective 1 July 2017. This increase represents almost double the inflation rate.
  5. The Government has confirmed that it will continue with the increase of the payroll tax rebate on wages for apprentices and trainees from 25% to 50% until 30 June 2018. The rebate is aimed at enabling Queensland employers to develop a highly skilled workforce and will be able to be used as an offset against payroll tax payable on the wages of other employees.  

Queensland Small Business

My colleague in Business Services, Kerri-Ann Smee, noted a number of small business references from today’s Budget. Particularly, these build upon the current business confidence, with a number of initiatives to help strengthen and stimulate the business economy. These include:

  1. Infrastructure spending - $42.75billion over 4 years – 29,000 new jobs and opportunities for business including: Transport & road upgrades, Schools, aged care and training facilities, Health facilities and infrastructure, as well as Energy and water initiatives.
  2. Employer support and job creation initiatives through skills and workforce development which is budgeted to add 40,000 jobs in 2017-2018 including:
  • Back to Work Program ($100million) – providing support for employers of long term unemployed or young unemployed both in regional areas and South East Queensland.
  • Jobs & Regional Growth Fund ($130million) – generating economic development and employment opportunities in regional Queensland.
  • Investment in health and education jobs.

Research and Development

My colleague, Research & Development Partner Nicola Purser, expects round 3 of the Ignites Ideas Program to open very soon! She was pleased to see the Queensland Government redirect $10 million from the less popular Advance Queensland programs to the highly popular Ignite Ideas Program. Ignite Ideas provides grant funding of up to $250,000 for proof of market or proof of product activities. The Ignite Ideas Program is designed to help early-stage, high growth potential businesses achieve scale, growth and profitability.

The Government has made hay while the sun shines!

The unexpected increase in the coal price has led to additional coal royalty revenue, contributing to the $2.8 billion surplus, and allowed the Queensland Government to touch major sectors across the state including transport, education, tourism, health, infrastructure and energy. This Budget plays well to the heartland which will hopefully give a social return but also shows signs of prudent economic management.

If you have any questions on how this year’s Queensland Budget will impact your business, please contact me.