Queensland election: push to seal Virgin deal before poll take-off

Queensland will today sign a $200m deal with embattled airline Virgin to keep its headquarters in the state.

LNP Leader Deb Frecklington addresses media at Brisbane’s Parliament House on Alice St in the CBD. Picture: News Corp/Attila Csaszar

Queensland will today sign a $200m deal with embattled airline Virgin to keep its headquarters in the state but cannot guarantee there will not be further job cuts.

Premier Annastacia Palaszczuk and Treasurer Cameron Dick confirmed the deal would be finalised today with Bain today, for the $200m previously announced.

A 10 per cent slice of that will be direct equity in the company, and the rest will be loans and other financial support.

Ms Palaszczuk said: “the deal will be signed off...this is absolutely important for Queensland”.

Mr Dick said it was imperative the deal was signed before caretaker mode started on Tuesday, ahead of the October 31 election, because the LNP Opposition has flagged it opposes the arrangement.

Mr Dick would not say whether Virgin had promised there would be no further job cuts under the deal.

However, he said the state’s return on investment would be seven per cent.

Rush to seal Virgin deal before poll take-off

Mr Dick conceded on Sunday he had ordered officials to finalise the agreement with US-based private equity firm Bain Capital, which bought out the ailing carrier, before the government went into caretaker mode ahead of the October 31 election.

Mr Dick said he was hopeful the deal was imminent as both the Liberal National Party and Labor announced “building to rent” plans in a bid to encourage property development as part of their election campaigns.

The knife-edge election — the first with a fixed date and a four-year term to follow — is too close to call, and will be largely fought in the regions where the Labor government, which has a two-seat majority, has eight seats on margins of 4 per cent or less.

Mr Dick said Virgin’s importance to the regions was one of the reasons the Palaszczuk government’s investment arm, the Queensland Investment Corporation, had offered the $200m to keep the airline in Queensland.

Treasurer Cameron Dick addresses media at the Translational Research Institute at Brisbane’s Woolloongabba on Sunday. Picture: News Corp/Attila Csaszar

“I am advised by the QIC that they are very close to finalising a deal with Bain,’’ he said. “We want to conclude it by caretaker.’’

The offer of the deal was first announced in May, before Bain Capital had successfully bid for the airline, which is now cutting ­regional routes in Queensland.

The LNP has raised concerns about the progress of the Virgin deal, saying it would not go ahead under an LNP government if it was not signed before the election and the money would be redirected ­towards tourism marketing and infrastructure.

Opposition Leader Deb Frecklington, who is heading her first election campaign, on Sunday announced a plan to give investors a 75 per cent discount on their land tax on any development of residential rental properties.

Ms Frecklington said the “building-to-rent” scheme would create 4600 jobs and $2bn in construction work, and it would make Queensland the lowest tax state for a build-to-rent scheme.

“Reducing tax on build-to-rent projects is a pro-jobs policy that will mean more work for carpenters, electricians, plumbers and suppliers,” she said.

“We will deliver the certainty needed to build and create jobs in these uncertain times.

“Under the build-to-rent model, developments are designed specifically to be leased to tenants.

“While it’s a fledgling industry in Australia, it is a $US3.3 trillion [$4.6 trillion] sector in the US and worth an estimated £70 billion [$126 billion] in the UK.”

The scheme has already been trialled by Labor in Queensland, and other states. Labor announced a “build to rent” trial in 2018.

The LNP said its plan was broader with the tax cut automatically given to private and commercial developments.

On Saturday, Mr Dick also announced $50m in financial incentives over 20 years for two developments as part of their build-to-rent scheme.

He said 240 apartments out of a total of 750 would have reduced rents at two building projects in the inner city.

“Following the finalisation of designs for the two projects, it is anticipated that construction will commence in mid-2021,” he said.

Property Council executive director Chris Mountford said the LNP proposal would boost investment and create thousands of jobs.

“We are delighted the LNP has committed to exceed the NSW government’s build-to-rent land tax incentives, which will make Queensland the most competitive jurisdiction in Australia for these projects. NSW’s tax changes caused major investors to reconsider investment plans, and with even greater incentives on the table, this announcement will put Queensland firmly on the investment map,” Mr Mountford said.