On Tuesday, Queensland Treasurer Curtis Pitt handed down the new Government’s first Budget, for 2015-16. The Budget focused heavily on achieving surpluses and using those surpluses to pay down debt. We were happy to see that this was achieved without resorting to increased taxes, charges and fees that would harm the state’s competitiveness.
The surpluses were achieved through relatively contained expenditure over the next few years as well as some accounting tricks that shifted burdens between arms of government and across accounting periods. Overall, however, the Government projects it will reduce overall public sector debt that includes public sector corporations by around $5 billion to $77 billion by 2017-18.
The main positive news for business from this Budget was a $180 million Advance Queensland program over the next four years. The program contain several streams, and we don’t have a lot of detail at this stage, but the streams are aimed at building greater collaboration between industry and researchers, ensuring greater commercialisation of innovative products and processes by businesses, and encouraging start-ups and venture capital in Queensland.
We believe these programs are worthwhile given the fact is that the Queensland economy must look beyond its heavy reliance on the resources sector and build a broader industrial base. Encouraging innovation and entrepreneurship among businesses is key to achieving this goal to build a broader and more sustainable economy.
The success of the Advance Queensland program, however, will depend heavily on the engagement of industry. Ai Group will work closely with the Queensland Government on the delivery of these initiatives, and we will be alert to any opportunities for our members. We are keen to hear from you if you have any thoughts or interest in these programs.
We believe this is a good long-term Budget, but it is clear that in the short-term, the Queensland economy would have benefited from immediate investments in productivity enhancing infrastructure to boost activity and provide a pipeline of work for industry. The wind down of the resources investment has led to soft demand in the Queensland economy and the unemployment rate is projected to head to 6.5% and stay there for three years. Unfortunately, this Budget did not commit to any new major infrastructure projects across the State. These are vitally needed and would also boost activity in the near-term at a time of slow activity. So we will continue to press the case with both the Queensland and Federal Government that they should work together in a timely fashion to deliver on much-needed projects to ensure Queensland’s prosperity.
Ai Group released a press release following the Budget announcement. Our Pre-Budget submission, handed to Government and the Opposition earlier this year, made the case for key reforms to lift competitiveness and productivity in the Queensland economy.
Are you a Queensland-based business? Have your say below on the State Budget, or let us know what you think of the Advance Queensland program.
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