Through revenue improvements, with regards to royalties and taxes, an operating surplus of $564m is expected for 2023-24.
However, the state is now forecasted for a $2.6b deficit in 2024-25, compared to a surplus of $135m in 2023-24. Total debt is projected to reach $103.2b in 2026-27, higher than what was predicted in 2023-24. By 2027-28 it’s estimated to reach $172b.
Separately, Queensland’s economy is forecasted to grow by 2.5 per cent in 2025-26.
Key highlights
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$26b over four years to deliver the Queensland Energy and Jobs Plan.
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$19.7b over three years to deliver Queensland Small Business Strategy 2024-2027.
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$16.5b for renewable energy projects.
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$7.1b across nine years for Brisbane 2032 Olympic and Paralympic Games infrastructure.
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An additional $4.4b to improve Queensland Health operations.
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$3.1b investment part of the Homes for Queenslanders.
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$1.274b to invest in school and early education infrastructure.
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An additional $1b to boost Capacity Expansion Program for Hospital and Health infrastructure.
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$100m over three years to support disaster resilience and mitigation projects.
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$15m across two years from Growing Future Tourism Program.
Revenue Measures
The State Budget has announced the following revenue measures.
Increased thresholds for first home stamp duty concessions
Targeting housing affordability, the Government has expanded its existing initiatives for first home buyers, increasing the property value threshold for the first home stamp duty concession from $550,000 to $800,000. No duty will be payable on the purchase of first homes valued up to $700,000 (increased from the current threshold of $500,000) and a partial duty concession will apply to homes valued between $700,000 and $800,000.
The Government has also increased the property value threshold for the first home vacant land stamp duty concession from $400,000 to $500,000, with no duty payable on land valued up to $350,000 (increased from the current threshold of $250,000) and a partial duty concession applying to land valued between $350,000 and $500,000.
These changes take effect immediately.
Increased rates for foreign land tax and stamp duty surcharges
The Government has announced increases to the surcharge land tax and transfer duty rates applicable to certain foreign owners, effective from 1 July 2024 subject to the passage of legislation. The foreign land tax surcharge rate will increase from 2 per cent to 3 per cent, while the additional foreign acquirer duty rate (AFAD) will increase from 7 per cent to 8 per cent.
These rate increases are intended to offset the expected greater market demand from first home buyers following the expansion of first home stamp duty concessions.
Defending the change, the Government has highlighted that the increased foreign land tax surcharge rate remains lower than the rates currently imposed in New South Wales and Victoria, while the increased AFAD rate brings Queensland into line with these southern states.
Payroll tax changes
From 2024-25, the 1 per cent regional payroll tax discount applicable to regional employers will no longer be available for very large businesses (i.e. businesses that pay Queensland taxable wages of more than $350m annually). The Government has supported this change on the basis that such businesses typically have greater capacity to contribute to state revenue than smaller regional employers.
The Government has also announced an extension to its existing 50 per cent payroll tax rebate currently available to employers who pay wages to apprentices and trainees. This rebate has been available since the 2016-17 financial year to date and will now be available for the 2024-25 financial year.
Other revenue measures
The Government has announced other revenue measures, predominantly aimed at easing cost-of-living pressures.
These measures include temporarily reducing all Translink public transport fares across Queensland to a flat 50 cents and halving the cost of Airtrain tickets to and from Brisbane Airport. These initiatives will be implemented on a trial basis for 6 months starting 5 August 2024.
The Government has also announced a temporary 20 per cent reduction in vehicle registration fees for light vehicles, effective for 12 months starting 16 September 2024. This is in addition to a freeze in the annual indexation of registration fees announced in 2023.
Alongside these various revenue measures and the cost of administering them, the Government has pledged additional funding to the Queensland Revenue Office to assist with revenue and penalty debt administration.
If you wish to discuss the Queensland Budget announcements, please reach out to a Grant Thornton Partner today.
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