Increased support for the health system and job creation centre of the Queensland Budget
The Budget projects an operating surplus of $1.9 billion for 2021-22, which is an improvement compared to the deficit anticipated 12 months ago by $5.4 billion. Tax and royalty revenues have contributed significantly to this result.
Further surpluses (although more modest) are anticipated from 2024-25. While net debt is expected to more than treble by 2025-26, at that level it would only be around 50 percent of general government revenue. This financial position has allowed headroom for additional spending commitments across portfolios.
Natural disasters have weighed heavily on the Queensland community over the last two to three years and the Budget includes $3 billion over four years for disaster recovery assistance. Child protection programs also receive nearly $2.2 billion over the forward estimates.
In terms of health services, the Budget commits an additional $8 billion over the forward estimates on operational expenditure, principally on operational growth and mental health services. There is also $6 billion of capital investment allocated to health infrastructure, including new and expanded regional hospitals and a new Queensland Cancer Centre..
On the revenue side, the Queensland Government will introduce a mental health levy from 1 January 2023 which will be added to the Queensland payroll tax liabilities of employers with a national annual payroll exceeding $10 million. This levy is expected to raise over $400 million annually by 2024-25.
Additional tiers of coal royalty rate will also apply from 1 July 2022. The highest marginal royalty rate will increase from 15 percent to 40 percent on the excess of the average price per tonne over $300. The Queensland Government estimates additional revenue of around $1.2 billion from this measure over the forward estimates.
There is an absence of announcements related to broader fiscal reforms that would support productivity growth. Given Queensland is in a relatively robust financial situation, there is an opportunity for it to take a lead role in implementing reform over the coming years.