Business, gas industry pay for heavy spending

Queensland Treasurer Jackie Trad has belted big business as the state government scrambles to fund heavy spending.

Former federal Labor resources minister Martin Ferguson complained that gas producers were not consulted over the increase. Picture David Moir

Queensland Treasurer Jackie Trad has belted big business as the state government scrambles to fund heavy spending on health, education and jobs-rich capital works without hiking taxes for ­average voters, which would jeopardise its re-election prospects next year.

While 1500 additional small-to-medium businesses will benefit ­directly from an increase in the threshold to $1.3 million for those subject to payroll tax, 6000 larger employers will be captured by a 0.2 per cent increase in the rate to 4.95 per cent. This will apply to companies with wages bills exceeding $6.5m a year, raising $544m over the budget forward estimates.

The government has also slugged gas producers with a 25 per cent increase in the royalty rate, from 10 to 12.5 per cent, infuriating the industry. Former federal Labor resources minister Martin Ferguson complained last night that gas producers were not consulted over the increase, to raise $476m to 2022-23 for the budget, and warned it would fire sovereign-risk concerns in the international investment community.

Land tax on holdings valued at more than $5m would also be ­increased 0.25 per cent, Ms Trad announced. While emphasising this would affect only a fraction of property owners — fewer than 0.4 per cent — to raise $238m over the forward estimates, the impost was denounced as unjustified by the Queensland Property Council.

“It’s simply not accurate to suggest these taxes won’t be paid by Queenslanders or won’t affect job-creating investment in the state,” the council’s executive director, Chris Mountford, said.

“Almost all of the properties that will be impacted by this tax hike are home to businesses ­employing thousands of Queenslanders in industries like manu­facturing, tourism, logistics and trade. The reality is that land tax is paid, either directly or indirectly, by the business that operates on the land.”

Ms Trad told The Australian last night the tax increase would be axed if the federal government made up the $860m that Queensland claims to have been short-changed in GST distributions over the budget forward estimates.

“I hear what the Property Council is saying, I understand their concerns and my commitment is rock solid,” she said. “If Josh Frydenberg and Scott Morrison give Queensland back its fair share of GST, then we will repeal those land tax increases.”

Describing the state budget as a “collection of ideas in search of a bigger narrative” employer organisation the Australian Industry Group said the land tax increase would be passed on to companies leasing property.

And the payroll tax changes were a “two-edged sword”, with the benefit of the lift in the threshold point on which it kicked in for small and medium businesses offset by the hit on larger employers.

“Industry is looking for budgets that provide clear incremental steps towards a reliable, 30-year plan for the state,” said Ai Group Queensland boss Shane Rodgers. “Instead, we have something of a Bohemian Rhapsody budget — ‘easy come, easy go’ with higher mining royalties and a ‘little high, little low’ on debt and infrastructure spending respectively.”

Ms Trad said the new payroll tax threshold was double Victoria’s, meaning a Queensland small business could employ twice as many people without paying more to the state. This was coupled with a 1 per cent discount on payroll tax available to any regional employer, regardless of size, with a staff composed of 85 per cent or more local workers that would ­assist up to 13,000 businesses.

Queensland will go to the polls in October next year, a big test for Labor after its poor showing in the Sunshine State in last month’s federal election helped return the Morrison government.