Big business will be hit with hundreds of millions of dollars in extra taxes and royalties as the Palaszczuk Government seeks to deliver payroll tax relief to small and medium-sized businesses in the hope of boosting jobs, particularly in regional Queensland.

This will also help the State Government deliver a modest budget surplus of $189 million in 2019-20, but do little to slow the steady rise in debt, forecast to hit $90.7 billion by 2023.

Treasurer Jackie Trad denied the Government had given up on reducing debt.

“The current levels of debt within the state of Queensland are both manageable and they are stable,” Ms Trad said.

But Opposition Leader Deb Frecklington said the state’s borrowings were a “$90 billion debt bomb”.

“All Labor are delivering is higher taxes, more debt, less jobs and less infrastructure,” Ms Frecklington said.

Ms Trad said about 13,000 businesses would benefit by raising the threshold at which payroll tax kicks in from $1.1 million to $1.3 million, and by cutting the rate by 1 percentage point for any employer with 85 per cent of its workforce outside the south-east corner.

It will cost the state Budget $885 million over the next four years, but more than half of this — $544 million — will be recouped by hiking the rate to 4.95 per cent for about 6,000 employers who have a payroll greater than $6.5 million.

Dan Petrie from the Chamber of Commerce and Industry Queensland (CCIQ) said the higher payroll tax rate for big business was “not ideal”.

But he said CCIQ was “delighted” with the increase in the payroll tax threshold for small and medium businesses.

“This will be transformative for a number of small businesses within the state,” Mr Petrie said.

LNG petroleum royalty rise

The LNG sector faces an increase in the petroleum royalty from 10 per cent to 12.5 per cent, which will pull in an extra $476 million over four years.

Ms Trad said it was time to review the royalty arrangements that were put in place to stimulate the industry when it first started in Queensland.

“We believe it’s time for that industry to do a bit more,” she said.

But Queensland Resources Council chief executive Ian Macfarlane said the gas industry was “bewildered” by the royalty increase.

“The industry has been completely blindsided by public statements by the Premier that there would not be a royalty increase in this Budget,” he said.

Mr Macfarlane said the resources sector had already delivered $900 million in extra royalties to top up the Government’s Budget this year.

“The thanks from this Government is to increase royalties to this sector again, and to put in jeopardy the thousands of jobs in regional Queensland that rely on export gas.”

In another Budget measure, companies and trusts will pay more land tax if they own property worth more than $5 million, raising another $238 million, although farms will be exempt.

That will be in addition to an increase in land tax for foreign nationals from 1.5 per cent to 2 per cent. After a backlash, Australian citizens who move overseas will not have to pay.

She has also ordered a crackdown on tax dodgers, establishing a tax avoidance squad that will specifically target payroll tax, land tax, royalties and transfer duty, hoping to pull in a further $220 million.

Expenses continue to increase as the size of the public service grows, amid continued demand for health and education services.

Public service cost cuts but no redundancies

Expenses continue to increase as the size of the public service grows, amid continued demand for health and education services.

Employee expenses are predicted to rise by 5.4 per cent in 2019-20, due to increased staff numbers and higher wages.

The State Government is attempting to cut costs by setting up a Service Priority Review Office within Treasury.

It will be tasked with finding $200 million in savings in 2019-20 and $500 million for every year from 2020-21 onwards.

But Ms Trad insisted redundancies were not on the Government’s agenda.

“That is not the intention,” she said.

Ms Frecklington said the new unit would have plenty of work to do in identifying ways to rein in expenditure.

“Under the Palaszczuk Government we’ve seen wasteful spending just go out of control,” Ms Frecklington said.

This year’s Budget will record a higher than expected surplus of $841 million.

High coking coal prices have again boosted royalties, which have been revised upwards by $838 million in 2019-20.

However, those windfalls will not continue, with coal prices and royalty revenue expected to drop in 2020-21.

Queensland’s share of GST revenue has been revised down by $2.3 billion over the period 2018-19 to 2021-22.

The slower housing market will also result in a $1 billion fall in transfer duty revenue over the forward estimates.

Originally published via the ABC.

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