Record coal prices will see mining companies face a hike to royalty rates, as the Queensland government touts major spending for the health system in the state budget.
Handing down his third budget today, Treasurer Cameron Dick also revealed big businesses would be hit with a mental health levy on payroll tax, while funding has been allocated to build new, previously announced, hospitals in Bundaberg, Toowoomba and Coomera.
"Each year, the health budget grows," Mr Dick said.
"But this year, the increase is much more than just the usual."
A surplus will also be delivered at the end of this month, thanks to the temporary surge in coal and oil prices and a booming housing market.
The unexpected net operating surplus – $1.9 billion for 2021/22 – is a big turnaround from the deficit forecast six months ago in December's mid-year budget update.
Mr Dick announced the state would be the first of the four governments that went into deficit amid the COVID pandemic – the federal government, NSW, Victoria and Queensland – to deliver a surplus.
However, as "factors unwind", the surplus is projected to slip to a $1 billion deficit the following two years, before returning to a modest $137 million surplus in 2024-25 and $183 million in 2025-26.
Net debt – the measure of what the government owes, minus its financial assets – is forecast to double over the next four years, from $19.7 billion in 2022-23 to $39.2 billion by 2025-26.
But that figure is still $11 billon lower than what the 2020-21 budget had forecast for 2023-24, with the budget papers calling it a "substantially improved net-debt position".
New progressive royalty scheme for coal mining companies
With a 10-year freeze on coal royalty rates expiring at the end of the month, Mr Dick said it was time for new arrangements to be introduced, amid record prices.
As of July, three new progressive royalty tiers will be introduced:
- 20 per cent for prices above $175 per tonne
- 30 per cent for prices above $225 per tonne
- 40 per cent for prices above $300 per tonne
These changes are forecast to deliver "an additional $1.2 billion in royalties over the forward estimates", Mr Dick said.
"All of that $1.2 billion, and more, will be going into regional Queensland," he said.
There will also be a mental health levy – a move that is predicted to generate $425 million each year by 2026 — to "provide a sustainable and ongoing source of funding to assist Queenslanders in need".
Levy for large businesses
From January, large businesses with national payrolls of more than $10 million will need to pay a levy of 2.5 cents for every $10 of taxable wages they pay above $10 million from January 2023.
Businesses with national payrolls of more than $100 million – like major supermarkets – will pay an additional levy of five cents for every $10 of taxable wages they pay above $100 million.
"Treasury modelling indicates this levy will only apply to around 1 per cent of all Queensland businesses," Mr Dick said.
It has also been previously announced the point-of-consumption gambling tax for betting companies will rise from 15 per cent to 20 per cent.
Mr Dick said the government was also cutting payroll tax for small and medium-sized businesses with payrolls between $1.3 million and $10.4 million – estimated to be about 12,000 businesses.
"This means a business with a $6.5 million of taxable wages will see over $26,000 extra each year in its bank account," he said.
Opposition treasury spokesman David Janetzki has accused the Treasurer of breaking an election promise not to increase or introduce any new taxes during the term.
"The Treasurer made it abundantly clear that there would be no new or increased taxes, there were no semantics, there were no fine details, it was a bald-faced promise," Mr Janetzki said.
"Today he has broken that promise."
Under questioning earlier, Mr Dick said "the people of our state knew what I was saying when I said it — we were very clear, we were very up front".
Premier Annastacia Palaszczuk added: "The people of Queensland would expect us as a responsible government to take some of these profits to put them back into services across the state".
Health spending
The budget includes $23.6 billion for health – a 5.6 per cent increase on the previous budget’s health spend.
The state government plans to deliver 2,200 additional overnight beds at 15 health facilities by 2028, including new hospitals at Toowoomba, Coomera, Bundaberg, as well as a Queensland cancer centre.
It also said there will be 289 additional beds via an "accelerated infrastructure delivery program" involving existing hospitals and facilities.
"Today our government commits $9.8 billion [over six years] for a funding program to expand the capacity of Queensland's health system, the biggest hospital building program in the history of Queensland," Mr Dick said.
