The Queensland Government’s COVID-19 Fiscal and Economic Review released today reinforces the extent of the financial challenge the State faces not just now, but also for the decades ahead.
Chris Mountford, Queensland Executive Director of the Property Council of Australia, says that with the State’s expenditure far outpacing its revenue, it needs to take a fresh look at new ways to create jobs and get economic activity happening.
“The fastest way to get activity happening is to remove the regulatory and financial barriers that are inhibiting the private sector from creating jobs and delivering new projects,” Mr Mountford said.
“Along this vein, the Property Council is pleased to see an extension to the State’s land tax relief arrangements. This cost saving will assist landlords and tenants as they to continue to work together to navigate the current challenges.
“However, today’s Fiscal and Economic Review is really a story of missed opportunities to take any significant action that will generate new job-generating private investment.
“The COVID-induced recession is different to what we saw through the GFC, and therefore our response must be different. Post-GFC there was a greater reliance on Government expenditure as there was a shortage of private capital in the market.
“Now, however, the globe is awash with capital seeking a safe, secure return. Queensland is well placed to capitalise on this appetite for investment, however the settings must be right to make the State an attractive place for investment.
“Today’s announcement of a $1 billion fund for Government to invest in private businesses is mis-placed. Rather than encouraging more private investment, this decision risks placing Government in competition with private capital.
“A more effective approach would see a revision of those taxation and regulatory settings that are preventing major investors from choosing Queensland.
“Whether it be removal of the foreign investor surcharges, reduction of land tax for build-to-rent, removal of stamp duty for off-the-plan dwellings, or simple acts like changing the strata title termination thresholds, there are many ways the Government could stimulate private sector activity rather than seeking to compete with it.
“Further, the Property Council is concerned that the integration of functions of Building Queensland and the Queensland Productivity Commission to within Queensland Treasury will hamper their ability to undertake independent reviews and provide frank advice to Government and transparency to industry.
“As independent bodies, BQ and QPC were able to set their own review agendas and consult widely with the private sector. This decision to transfer both bodies ‘in-house’ restricts their autonomy and independence and will ultimately lead to more politically driven decision making.”