The Queensland government will spend big on transport infrastructure over the next four years, but the 2019-20 budget still lags behind the 25-year state average for construction spending.
Key players in the building sector must have waited with bated breath when the Palaszczuk government unveiled the 2019-20 state budget in June.
After all, it hasn’t been an easy year. The demand for new construction projects fell significantly around Australia.
“In annual terms, the trend estimate for total dwelling units approved in Queensland in March 2019 was 35.1% lower than the March 2018 estimate. In comparison, total dwelling units approved in Australia decreased 22.4% over the same period.”
Queensland Government Statistician’s Office
There’s also a strong need for urgent construction work to repair extensive damage from the monsoon that hit Townsville and surrounding areas in February.
So how did the state budget live up to expectations?
Master Builders has tentatively praised the government for lifting its game on public buildings and infrastructure.
Public buildings will receive $10.2 billion, which is $1.4 billion more than the 2018-19 allocation.
We’ve been calling on the State Government to increase expenditure on public sector building and construction – residential and non-residential buildings, together with engineering construction – to reach the 25-year average as a proportion of gross state product (GSP). This budget is one more step towards that goal.
Education is set to benefit from this. Four new state schools will be built and refurbished, while existing ones are maintained to the tune of $1.4 billion.
Queensland Education Minister Grace Grace:
“This will see new and enhanced classrooms, libraries, canteens and administration areas built at these schools, which will make these great schools even better.”
Transport infrastructure has emerged the obvious winner, attracting a record amount of funding that represents 42 per cent of the budget. The state government will invest $23 billion over the next four years.
More than half of this allocation ($14.5 billion) will be spent outside the main cities and local government areas, according to Transport Minister Mark Bailey.
“Regional Queensland is the big winner in this infrastructure budget because Queensland’s regional towns and cities are the engine room of our state’s economy,” he said.
“When our regions thrive, Queensland thrives, so this budget will ensure tens of thousands of jobs are created in the regions, supporting their population growth and economic development.”
Some of the transport projects include:
$1 billion to improve section D of the Bruce Highway
Sealing the Peninsula Development Road
Improving the Warrego Highway (west of Toowoomba)
Upgrading the Ipswich Motorway
Fixing three M1 interchanges, Exits 41, 49 and 57
Overcoming congestion on Queensland roads
Ring road projects in Townsville, Rockhampton, Mackay and Cairns
$900 million to improve safety
$497 million for the Mackay Ring Road
Rail and public transport infrastructure:
Billions of dollars for rail and passenger transport infrastructure
$160 million for the North Coast Line
$250 million underground interchange for Inner Northern Busway to Cross River Rail
Station upgrades and network improvements across the board
$250 million for the Inner Northern Busway at Roma Street Station
600 new car spaces at Greenbank bus park ‘n’ ride
$30 million for a container terminal to give trains better access to Townsville Port
$100 million for boat ramps, jetties and dredging
$3.5 million to build the Shute Harbour Road boating facility
Upgrades to the Dohles Rocks Road boat ramp
$17.2 million for the North Brisbane Bikeway
$42.7 million to build the Veloway Cycleway project
$4 million for on-road bicycle lanes between Levington and Kingston road
Changes to payroll tax
Small business will benefit from payroll tax changes that see the threshold rise to $1.3 million.
Regional employers will enjoy a one per cent discount that applies to smaller companies.
The apprentice and trainee rebate will also be rolled out for a bonus year.
Local government and regional infrastructure projects will receive an extra $70 million dollars.
This is part of the Building our Regions program that’s already supported 174 critical projects and 2400 jobs, according to government.
Criticism of the 2019-20 Queensland budget
Master Builders has labelled this budget as a step in the right direction, but not without criticism.
Deputy CEO Paul Bidwell says that 2019-20 spending falls below the 25-year average for Queensland.
The government needs to spend the entire budget allocation and not hold money back.
It seems they didn’t have the best track record in 2018-19 when $200 remained unspent, according to Master Builders.
“As a result, thousands of potential jobs across the state have gone begging,” Mr Bidwell said.
Another sore point is there’s no direct support for the housing sector, and the First Home Owners’ Grant won’t be boosted to encourage the purchase and building of new homes.
There’s also the looming commencement of the new Waste Levy to contend with, which means that companies will pay $75 dollars per tonne of rubbish that goes to landfill.
Although this will benefit the environment by reducing commercial and industrial waste generation, there are concerns it could lift the cost of land for new building projects, especially when coupled with the land tax increase for large landholders and foreign owners.
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