On 10 December, Queensland Treasurer Andrew Fraser handed down the Bligh Government’s Major Economic Statement, detailing the Mid Year Fiscal and Economic Review of the 2008-09 budget.
The review sought to address the deterioration of the State’s finances as a result of global financial and economic conditions.
Key points include:
- Queensland’s Gross State Product is expected to reach 3% in 2008-09, lower than the projected 4.25% forecast at the June budget.
- Employment is expected to grown by 2.25% in 2008-09, lower than the projected 2.5% forecast at the June budget.
- The year average unemployment rate is expected to rise to 4.25%, higher than the forecast of 3.75% at the June budget.
- Tax revenue estimates have reduced $884 million since the 2008-09 budget, primarily due to a significant slowing in property market activity.
- Queensland’s net operating balanced will be reduced to a surplus of $54 million, compared with the June budget estimate of $809 million.
- Queensland is forecasting deficits in 2009-10 ($124 million) and in 2010-11 ($85 million) before returning to surplus in 2001-12.
Policy measures to address the state’s decreasing revenue include:
- Increase in motor vehicle registration fees from 1 July 2009 (forecast to raise $194 million).
- Increase tax rate on casino gaming machines by 10% from 1 July 2009 (forecast to raise $36 million).
- An 0.5% surcharge on landholdings exceeding $5 million from 1 July 2009 (forecast to raise $93 million).
- The abolition of transfer duty on core business assets will be rescheduled to 1 July 2012.
- Introduction of a further public sector efficiency target of $100 million per annum from 2009-10, rising to $200 million from 2010-11.
- Deferral of construction of Queensland’s Police Academy by two years.
Treasurer Fraser maintained the Government’s planned $17 billion 2008-09 capital works program, which is estimated to support 119,000 jobs.
The State’s capital works program includes projects such as the Gateway Bridge duplication, the Eastern Busway, Gold Coast Hospital and the Abbot Point Coal Terminal expansion.
For further information, see: http://www.treasury.qld.gov.au/office/knowledge/docs/mid-year-review/index.shtml