The lagging Queensland property and tourism property sectors have been given some reprieve in the Queensland state budget for 2011-12, with first home buyers given a $10,000 credit as part of an effort to boost the state’s struggling economy.
Business groups, including the Australian Industry Group, have welcomed the budget, saying it provides small operators and struggling companies confidence in the state’s economy.
Treasurer Andrew Fraser has still forecast a deficit of just over $4 billion for the 2011-12 year, but pledges the state will be back in surplus by 2015-16, just two years after the Federal Government is also forecast to return to surplus.
“This is a budget which seeks to broaden out the economic expansion so that more Queenslanders can be part of the economic prosperity that is occurring and building in this State,” Fraser said yesterday.
“It seeks to join in to that great investment boom that’s occurring at this point, being led by our resources sector being led by our LNG sector. That’s why this budget proposes to make real choices.”
The Bligh Government claims the property market will be “fired up” by its new initiatives, which include a $10,000 grant for new home owners, although stamp duty charges have also been increased.
The move comes after the property market has continued to suffer in Queensland. Listings have skyrocketed leading to downward pressure on prices, especially on the Gold Coast, and some experts believe price drops could reach double-digits by the end of the year.
New research out today also shows one in 50 Queensland mortgage holders have missed a payment.
The budget includes a $10,000 grant for first or new home buyers in the six months from August 1, with first-home buyers also given an initial $7,000.
However, the initiative will be paid for by collecting $161 million from home owners who previously accessed a discount on stamp duty for established homes that were used as a primary place of residence.
While the Government has said the change won’t be welcomed by all, Fraser says the existing stamp duty arrangements haven’t done much to encourage new building.
The property industry has given the initiative a mixed welcome, with the Real Estate Institute of Queensland warning any short-term benefit may be negated by the stamp duty charges, while the Queensland Property Council has said the move will encourage new building.
The Housing Industry Association has also welcomed the initiative.
The construction industry has also been given a reprieve, with capital investment in Queensland Health and the police force awarded to invest in new infrastructure, including upgrades for IT services.
But the tourism industry is the second biggest winner of the day, winning $83 million over the next four years dedicated to events to help the state recovery from the impact of the floods, which have kept tourists away since the start of the year.
The funds will be spread across the state, with $12 million earmarked for an upgrade to the Queensland Museum. Over $6 million will be awarded to the Cairns Convention Centre, $35 million for cyclone Yasi rebuilding projects and $9 million for the Foreshore Cityport Project.
The Tourism and Transport Forum welcomed the announcement, with chief executive John Lee saying the Government has made a “clear strategic choice”.
“The additional investment in events shows that the Queensland Government has chosen to focus on building a sustainable tourism industry by developing a strong events calendar statewide.”
“It’s also important to note that the Government has put significant extra money into Tourism Queensland in the current financial year as part of recovery efforts in the wake of the floods and cyclone Yasi.”
Queensland Tourism Industry Council chief Daniel Gschwind also said the funding will help the state stay competitive, while the Accommodation Association of Australia has also applauded the Government, saying providers are now more confident about the future.
Some of the other initiatives in the budget include:
Patrick Stafford is a freelance journalist and a former deputy editor of SmartCompany.
