2022-23 Queensland Budget Update

The 2022-23 Queensland State Budget was delivered on Tuesday 21 June 2022.

The Budget announces record spending by the Queensland Government on health and education.  Queenslanders can also expect significant investment in public infrastructure to support the record levels of interstate migration and the long-term preparation for the 2032 Olympics. 

This high-spending Budget has been delivered off the back of strong conditions in the housing and labour markets and increased royalties due to surging coal and oil prices.  To continue to support these spending initiatives the Budget has, in one of the more controversial measures, significantly increased coal royalties.

Taxes, royalties and levies

Currently, Queensland’s largest sources of taxation revenue are payroll tax and transfer duty. The Budget announces a number of new taxation measures to support these revenue streams.  Coal companies, betting operators and large businesses face new or higher taxes in particular.  The key measures are:

• Coal royalties: Higher progressive coal royalty rates will apply to coal sold, disposed of or used on or after 1 July 2022 as the 10-year freeze on coal royalties ends. Since 1 October 2012, the highest marginal coal royalty rate was 15%, payable where the average price per tonne exceeded $150. Three new progressive royalty tiers will be introduced:  20% for prices above $175 per tonne, 30% for prices above $225 per tonne and 40% for prices above $300 per tonne. This measure is expected to provide additional revenue of $1.2b over the next four years (on the assumption that coal prices will normalise in 2023).
• Mental health levy: To fund mental health services, a mental health levy will apply to payroll tax liabilities arising on or after 1 January 2023.  A 0.25% levy will apply to annual Australian taxable wages of employers, or groups of employers, above $10m, and an additional 0.5% levy will apply to taxable wages of employers, or groups of employers, above $100m.  The levy will only apply to the portion of the wages above the relevant threshold. This measure aligns with a similar levy introduced in Victoria and is expected to provide annual revenue of $425m by 2025-26.
• Racing levy and tax on bonus bets: To fund Queensland’s racing industry, the Government will apply a new 5% racing levy to the betting tax rate.  Bonus bets will also be incorporated into the calculation of betting tax for liabilities arising on or after 1 December 2022.  Taxing bonus bets will bring Queensland in line with betting arrangements in other Australian jurisdictions.    
• Payroll tax relief and rebate: From 1 January 2023, payroll tax deductions will be available for employers with annual Australian taxable wages of up to $10.4m (increased from a ceiling of $6.5m). This measure is expected to benefit more than 12,000 Queensland businesses.  In addition, the current 50% payroll tax rebate for wages paid to apprentices and trainees will be extended for 12 months until 30 June 2023.
• Exemption from additional foreign acquirer duty: Foreign retirement visa holders (subclass 405 or 410) will be exempt from additional foreign acquirer duty on the purchase of their principal place of residence on or after 1 January 2023, subject to certain conditions. The proposed exemption will require the acquirer to occupy a residence on the land as their principal place of residence within 1 year after becoming entitled to possession of the land (or 2 years if there is no residence on the land at the time the liability for transfer duty arises).

Health

With a major focus on health spending, the Budget has allocated a record $23.6 billion to health for 2022-2023 to help meet the growing demand for public hospital services. The Budget focuses on investing in new hospitals and facilities, hiring additional workforce, redesigning models of care and supporting mental health. The highlights of the Budget include:

• $22 billion for health and ambulance services;
• $1.6 billion to improve mental health and wellbeing over a five-year period;
• $1.5 billion for health capital spend in 2022-2023;
• $9.78 billion additional funding over six years allocated for the Capacity Expansion Program, which will deliver 2,200 additional hospital beds by 2028;
• $229.7 million funding over two years allocated for the Accelerated Infrastructure Delivery Program; and
• $943.5 million funding over seven years to replace rural and remote health facilities.

Infrastructure

With Queensland’s rapidly growing population, the Government has strongly focused on infrastructure as an integral aspect of the Budget. The Budget announces a 4-year infrastructure investment program of $59 billion to enhance the States productive capacity, improve service delivery and sustain jobs across all regions of the State.

Significant projects continuing or commencing delivery as part of the Budget include:

• $9.785 billion for the Queensland Health Capacity Expansion Program (as mentioned above); and
• over $7.3 billion for transport infrastructure, such as road, rail, port, bus, cycling and marina infrastructure (key projects being the Cross River Rail Project, Coomera Connector, Gold Coast Light Rail and upgrading the Pacific Motorway).

Other initiatives

A key platform of the economic strategy in the Budget is focused on facilitating trade opportunities, a skilled workforce, innovation, infrastructure, digitalisation and technology, Environment, Social and Governance credentials, and a competitive investment environment. At the same time, the Government aims to provide better services and protect Queenslander’s lifestyle.

In this context, other key spending initiatives in the Budget include:

• $19.6b committed to education and training, part of which will fund five new primary schools, the expansion of existing schools, and more teachers and teacher aids;
• $2.2b over 5 years committed to child protection services;
• $2.9b committed to police services including additional police personnel, facilities and equipment;
• $291.8m over four years committed to resource recovery and recycling policies, which will contribute to implementing waste management plans, expanding resource recovery programs and supporting environmental activities;
• $262.5m over four years committed to deliver Queensland’s Protected Area Strategy 2020-2030 which will support the growth, management and sustainability of the State’s protected areas;
• $150m over 10 years committed towards a new Queensland Trade and Investment Strategy to enhance Queensland’s trade opportunities;
• $68.5m over 5 years committed to implement the proposed Queensland Resources Industry Development Plan which will establish a 30-year vision for Queensland’s resources industry and will aim to fast track new economy minerals production and processing; and
• $6.8m in concessions (including subsidies, discounts and rebates) for individuals and families in 2022-23, including a $175 cost-of-living rebate on Queensland households’ power bills.