- The budget delivered a surprise net operating surplus of $1.9 billion in 2021-22
- A mental health levy on large businesses will help fund $1.6 billion in mental health services
- Net debt continues to increase and is forecast to reach $39.2 billion in 2025-26
The 2022-23 Queensland budget delivered by Treasurer Cameron Dick on 21 June includes tax changes and prioritises investments in the health system, infrastructure and job creation.
Queensland’s economy (Gross State Product) is forecast to grow by 3% by the end of June this year and then average 2.75% per annum over the forward estimates. Inflation is predicted to decrease from 5.25% in 2021-22 to 3.75% in 2022-23.
Employment growth of 3% is expected in 2022-23 and the state’s unemployment rate is forecast to remain low at 4%, rising modestly to 4.25% across the forward estimates.
A surprise operating surplus of $1.915 billion is forecast in 2021–22, which is an improvement of $5.4 billion on the deficit forecast in the previous budget. The budget is expected to record a deficit of $1.029 billion in 2022-23 and return to a modest surplus of $137 million by 2024-25.
Net debt is projected to increase from $11.39 billion in 2021-22 to $19.77 billion in 2022-23, before almost doubling over the next four years to $39.21 billion in 2025-26.
Key budget announcements
Outlined below are the key budget announcements to help members guide their clients and businesses.
The budget provides a record $23.6 billion in 2022-23 for frontline health services and healthcare infrastructure.
Capital funding of $9.8 billion will support the largest hospital construction program in the State’s history and create 48,000 jobs in 2022–23.
The funding will support new hospitals, upgrades and expansions at existing hospitals, 2,200 additional hospital beds and new ambulance stations.
The budget’s record health investment also includes $1.645 billion over five years for mental health services, together with $28.5 million in capital funding.
2. New mental health levy
To provide ongoing sustainable funding for mental health services, large businesses will pay a new mental health levy on payroll tax liabilities arising on or after 1 January 2023.
The mental health levy will apply as a 0.25% cent levy on annual Australian taxable wages above $10 million. An additional 0.5% levy will be applied on annual Australian taxable wages above $100 million.
The levy will only apply to the portion of the wages above the respective taxable wage amounts. Treasury modelling indicates that this levy will only apply to 1% of Queensland businesses. The levy is expected to raise $425 million in revenue by 2025-26.
This measure follows the mental health levy introduced in the 2020-21 Victorian Budget which required businesses with annual Australian taxable wages over $10 million to pay an additional .5% levy and those over $100 million to pay an additional 1% levy.
3. Other payroll tax changes
Payroll tax relief will be provided for more than 12,000 small to medium Queensland businesses through adjustments to the payroll tax deduction framework.
From 1 January 2023, the current payroll tax deduction ceiling will be extended from $6.5 million to $10.4 million in annual Australian taxable wages . This reflects an increase in the phase out rate of the deduction from $1 for every $4 of taxable wages, to $1 for every $7 of taxable wages.
This change will increase the number of small to medium sized employers eligible for a deduction and lower their payroll tax.
The 50% payroll tax rebate on wages paid to apprentices and trainees will also be extended for 12 months until 30 June 2023. Employers of apprentices and trainees will welcome this rebate extension which will reduce their overall payroll tax liability.
4. Foreign acquirer duty and betting tax rate
Retirement visa holders will now be exempt from additional foreign acquirer duty where they purchase property to use as their principal place of residence on or after 1 January 2023. This change will ensure that, subject to conditions, retirement visa holders who purchase a home will not be subject to a duty surcharge rate, only duty at standard concessional rates.
A 5% racing levy will be applied to the betting tax rate, bonus and free bets will be taxed, and the proportion of betting tax revenue allocated to Queensland’s racing industry will increase from 35% to 80%. The changes will begin from 1 December 2022.
5. New coal royalty rates
With record coal prices in Queensland, and the 10-year freeze on coal royalty rates expiring at the end of June, the budget introduced three additional progressive coal royalty rates.
The new tiers will apply on the average price per tonne of coal sold, disposed of or used on or after 1 July 2022, at a rate of:
- 20% on that part of the average price that is more than A$175 but less than A$225,
- 30% on that part of the average price that is more than A$225 but less than A$300, and
- 40% on that part of the average price that is more than A$300.
The current tiers will continue to apply where the price of coal is A$175 or less per tonne.
The changes are forecast to deliver $1.2 billion in additional royalties over four years to 2025-26.
6. Concessions and subsidies
The budget provides a range of concessions, subsidies and rebates to help ease cost of living pressures. In 2022-23, the total value of these measures is $6.8 billion. This includes $385 million for a new $175 cost of living rebate for household power bills.
Energy concessions for households and businesses have increased to $1.34 billion in 2022–23. General transport concessions have also risen to $2.14 billion in 2022–23.
Further funding of $55 million is also provided over three years for Zero Emission Vehicle (ZEV) purchase subsidies and charging infrastructure. The ZEV purchase subsidy is a $3,000 incentive for buying an electric vehicle to the value of $58,000.
7. Small business
The budget commits $39.1 million over four years and $12.6 million per annum ongoing to continue to provide small business grants and the Mentoring for Growth program.
Increased funding of $10.1 million over four years and $3.2 million per annum ongoing will establish a permanent appointment of the Queensland Small Business Commissioner.
The Made in Queensland and Manufacturing Hubs Grant programs also receive $50 million over two years to help small and medium sized manufacturers build advanced manufacturing capability in regional areas.
8. Housing affordability and supply
The budget includes $150 million over three years to increase the Catalyst Infrastructure Fund (subject to a minimum co-investment by developers) to improve housing supply in priority areas, $50 million over three years for the Growth Acceleration Fund to support the delivery of priority trunk infrastructure in targeted growth areas, and $10 million over two years to address land supply, population growth and property development challenges.
Social housing is allocated the largest budget investment in Queensland’s history, receiving $1.9 billion over four years. This is supported by returns from the $1 billion Housing Investment Fund which will support current and future social and affordable housing needs.
The Queensland Government’s managed housing rental rebate also supports approximately 54,700 low-income households and has increased to $541.3 million in 2022–23.
The budget commits $7.3 billion for transport capital investment in 2022-23, including road, rail, port, bus, cycling and marine infrastructure.
To support Queensland in hosting the 2032 Olympic and Paralympic Games, the budget also provides additional funding of $186.1 million over four years to operate and maintain the state's portfolio of major sporting stadiums and high performance and community venues.
10. Drought assistance and reform
Additional funding of $172 million over four years is provided in the budget to continue drought reforms to enhance resilience. Increased funding of up to $3.2 million (totalling up to $13 million) over four years from 2022-23 is allocated to the Drought Relief Assistance Scheme to maintain existing freight subsidies and emergency water infrastructure rebates.
The Drought Assistance and Reform Package is a total of up to $79.6 million over four years from 2022-23. The budget also provides $150 million over three years to help farmers prepare, manage, and recover from the impacts of drought.
The budget contains a provision for the Queensland Energy Plan that will be released later this year and will provide a roadmap for a sustainable and affordable energy future.
To support Queensland’s energy transformation, the Government has committed $192.5 million for the Wambo Wind Farm and $43.9 million to support Stanwell and CS Energy hydrogen projects. In addition, up to $48 million is allocated for pumped hydro energy storage projects.
A further $10 million will be provided for a pilot to improve supply and storage of energy in regional communities through local solutions such as microgrids.
2022-23 Queensland Budget Papers
View all the Budget Papers for 2022-23.Read more
Mentoring for Growth program
The Queensland Government’s Mentoring for Growth program currently has mentors ready to connect with impacted small businesses. Mentors are available to provide tailored support including financial mentoring and business planning.Read more
CA ANZ’s Federal Budget coverage
Our CA ANZ experts attended Budget lock-up to analyse the major business, tax and superannuation announcements that members need to know to guide their clients and businesses.Read more