Debt to push past $90 billion in four years as State targets regions

Debt is set to push past $90 billion within four years under a big borrowing, big taxing state budget, which contains multiple love letters to regional voters — including one with a promise of more than 25,000 jobs.

DEBT is set to break through the $90 billion mark within four years under Jackie Trad’s big borrowing, big taxing budget containing multiple love letters to disillusioned regional Queensland voters.

Ms Trad has revealed her second Budget will contain a $50 billion capital spend over four years with $12.9 billion to be spent in 2019/20 to create 40,500 jobs.

She said about 25,500 of those jobs would be created in the regions outside the greater Brisbane area with 60 per cent of the infrastructure spend allocated to regional projects.

But that spending comes at a cost, with more than $1.7 billion in new or increased taxes including royalty increases for gas companies and debt on track to hit $90.7 billion by 2022/23.

Queensland Treasurer Jackie Trad during this morning’s State Budget media briefing. Picture: Glenn Hunt/AAP

Borrowings this year alone will jump to $78.715 billion in 2019/20, up from the $75.214 billion forecast in last year’s budget.

Ms Trad referenced the growing debt in her Budget speech but stuck to a much lower figure, how much was owed to the Queensland Treasury Corporation.

“Our commitment to keep building job-generating infrastructure and capital projects will see our borrowing with Queensland Treasury Corporation remain at affordable levels — $72 billion in 2019-20,” she said.

Ms Trad said the increased total debt was partly due to a new accounting measure forcing the government to count leases like the long-term lease over 1 William street as debt rather than as an operating expense.

Those leases added $6.2 billion to the debt bill in 2019/20 and $7.254 billion to the total in 2023/23 when it total debt is due to reach more than $90 billion.

Ms Trad announced a major Budget sweetener for Queensland business, an $885 million payroll tax relief package with big business to be slugged more to help cover the cost.

“From July the exemption threshold for payroll tax will be increased for all Queensland businesses from $1.1 million to $1.3 million. This will mean 1500 additional businesses will no longer pay any payroll tax,” the Treasurer announced.

“As well, regional business who employ 85 per cent or more local workers will receive a payroll tax discount of 1 per cent off the set rate.

“Our combined payroll tax threshold increase and the regional discount will mean an estimated 13,000 businesses are better off.”

Employers who increase their full-time workforce for two years from July 1 could also be eligible for a rebate on the payroll tax paid on those additional employees under the package, while the apprentice and trainee rebate will be extended to June 30, 2021.

To help pay for the package, a higher rate of 4.95 per cent payroll tax rate will be introduced for businesses with taxable wages of more than $6.5 million a year, raising about $544 million over four years.

An extra $778 million will also be raised by increasing land tax rates for companies and trustees with aggregate landholdings of more than $5 million by 0.25 per cent and by increasing the absentee land tax surcharge to two per cent.

That surcharge will also be extended to foreign companies and trustees of foreign trusts.

Ms Trad said she was introducing the new taxes “reluctantly” sheeting home blame to Commonwealth funding cuts including an $866 million reduction in GST.

She pledged to repeal the taxes should that funding be restored.

“The measures will help buffer Queenslanders from Canberra’s rip-off,” Ms Trad said.

“The Government makes these land tax changes reluctantly. And so I make this commitment.

“If Canberra fixes the current bias in their GST calculations and returns what we are owed, we will repeal these land tax measures.

“I urge Queensland business to lobby their State and Federal LNP Members of parliament. Demand they return Queensland’s fair share of GST.”

Ms Trad has made good on her pledge to freeze coal royalties for at least a year with gas companies to bear the brunt of an increase to help bolster the bottom line.

The petroleum royalty rate will increase by 2.5 per cent to 12.5 per cent to raise $476 million over four years.

About $19 million will be allocated to help open up the next big industry for the state, exporting hydrogen.

A special unit will also be set up within Treasury to chase down outstanding revenue, expected to claw back about $220 million over four years.

The unit will target areas such as payroll tax, land tax, transfer duties and royalties.

The Budget comes just weeks after Federal Labor’s election drubbing in regional Queensland and the impact of that loss and was writ large in Ms Trad’s Budget Speech.

She declared it was a budget for regional Queensland.

“Our tourism regions. Our agricultural regions. And our coal and resource regions,” she told the House.

“Our regions define who we are as Queenslanders. When our regions do well, all of Queensland does well. And so in shaping this Budget, it is regional Queenslanders who have been at the forefront of our thoughts.

“Since 2015, the Palaszczuk Government has invested $29 billion in infrastructure outside of Greater Brisbane. That’s almost 70 per cent of our entire capital spend — to strengthen our regional economies and improve hospitals and schools.

“We continue our focus on job generating infrastructure with an investment of $49.5 billion over four years. This year the capital program will invest almost $13 billion in job generating infrastructure, directly supporting more than 40,000 jobs. And more than 25,000 or 63 per cent of those jobs will be in regions outside of Greater Brisbane.”

As revealed in The Courier-Mail , the surplus has come in almost $700 million higher than expected at $841 million.

Ms Trad confirmed an expected $1.3 billion hit to the Budget to following the recent summer of disasters and a $1 billion stamp duty writedown.