Qld Budget 2022: $1.2b mining royalties hike, business tax for mental health

The Premier and Treasurer have been forced to defend their election pledge after a new levy on businesses was revealed in the State Budget.

Mining companies will cop a royalties hike expected to inject an additional $1.2 billion into Queensland coffers, while businesses will bankroll critical funding in a bid to fix the fractured mental health system, in this year’s State Budget.

After pledging no new or increased taxes at the 2020 state election, Treasurer Cameron Dick said today it was only fair coal companies paid Queenslanders more following an unexpected boom in prices.

But he and Premier Annastacia Palaszczuk were forced to defend their election pledge amid further revelations businesses with an annual wages bill over $10 million would have a new levy slapped on them to help fix the mental health crisis.

“They (Queenslanders) knew what I said, I was very clear,” Mr Dick said when asked whether the Government had broken that promise.

“I think we were very upfront.”

During the 2020 election, the Treasurer pledged no new or increased taxes when he was asked whether businesses would cop any sort of hike.

Ms Palaszczuk said she believed Queenslanders “are on our side” when it came to hiking coal royalties, as she insisted the revenue would be reinvested into hospitals and schools.

Total debt over the forward estimates will remain largely unchanged at $128.5 billion compared with last year’s Budget – however a $1.9 billion surplus is now expected for 2021-22.

Treasurer Cameron Dick today. Picture: Dan Peled/NCA NewsWire

This is compared to the $1.4 billion deficit that was predicted at the Budget update last December and is largely attributed to a temporary surge in coal and oil prices and increased stamp duty revenue.

But as “these factors unwind”, a deficit of about $1 billion is expected during 2022-23 before climbing to a $153 million surplus in 2024-25.

Net debt is expected to hit $39.2 billion in 2025-26 – a significant jump from $19.7 billion this financial year.

Unemployment is expected to remain steady at about 4 per cent over the forwards, as Mr Dick spruiked the 206,000 new jobs created in Queensland since March 2020.

The “record” health budget will increase by $1.4 billion compared to last year to $23.6 billion with the Government promising to deliver 2200 new hospital beds over six years.

Mr Dick said the allocation contained the greatest ever uplift in health capital spending.

Among the announcements are funding for new hospitals in Coomera, Toowoomba and Bundaberg which have previously been announced.

Three new tiers have been added to Queensland’s coal royalty structure – with companies to now pay 20 per cent on the dollar when prices exceed $175 per tonne.

They will have to pay 30 per cent on the dollar when prices climb beyond $225 per tonne and 40 per cent when they exceed $300.

This is in addition to the current three tiers.

Premier Annastacia Palaszczuk today. Picture: Dan Peled/NCA NewsWire

“Each of these new tiers applies only on the margin, so at a coal price of $302 per tonne, the 40 per cent rate would only apply to the last $2,” Mr Dick said.

“We know the foreign shareholders of coal companies won’t like these changes.

“But they can rest easy.

“We are not increasing the rates that apply at the existing tiers as the former LNP government did in 2012 during an industry turndown.”

The royalty increase is expected to pump an extra $1.2 billion into the state’s coffers over the next four years.

Meanwhile a 0.25 per cent mental health levy on businesses with an annual wages bill of more than $10 million will come into effect from January 1 next year.

“Businesses with annual wages over $100 million will pay an additional 0.5 per cent levy,” the Treasurer said.

This is expected to impact about one per cent of all Queensland businesses – or about 5000 – and is expected to generate $425 million each year.

But mental health funding overall will only increase by $1.6 billion over five years – considerably lower than the $750 million that stakeholders had wanted each year recurrently.

Meanwhile, a 5 per cent levy will be slapped on the existing betting tax in an effort to “level the playing field” between Tabcorp and online bookmakers.

At least 80 per cent of the revenue will be funnelled directly back into the racing industry, a significant jump from the previous cap of 35 per cent.

The Government is also increasing the number of businesses who will be eligible for a payroll tax deduction.

Shadow treasurer David Janetzki said that after destroying the health system over seven years, the Government was asking for another seven years to fix it.

“Is it any wonder that Queenslanders don’t trust the Palaszczuk Government any more?” he said.

“The Treasurer promised 26 times not to increase or introduce any new taxes – today he has broken that promise, and his integrity lies in tatters and it will be the Queensland people that pay.”

Mr Janetzki said Mr Dick had made a “bald-faced promise to the Queensland people and now it is a bald-faced lie”.

He said the Opposition had always called for more dedicated health funding.

“But the challenge has always been with this Labor Government to get the right money in the right areas,” he said.

“From my early reading of the Budget papers – the three new hospitals, for instance, have got $20 million assigned to them next year – the rest of that funding into those hospitals is undefined and goes beyond that period of time.”