Queensland - beautiful one day...

Well the budget has hit the fan. And what a long way we’ve come from only a short year ago when it was announced that “Queensland is experiencing the most sustained period of economic and population growth in its history...in shaping the 2008-09 Budget, the Government has chosen to build tomorrow’s Queensland today”.

Today, Treasurer Andrew Fraser has defined the 2009-10 Budget as “about the future” – a future that involves a forecasted $1.95 billion operating deficit, with borrowings expected to exceed $85 billion by 2012/13. The Queensland economy is predicted to continue in this deficit trend for the next eight years.

As a catalyst for this, the Treasurer also released expected figures for the health of the Queensland economy, figures that mirror the slow-down experienced by Australia as a whole. It is expected that the economy will contract by 0.25% in 2009/10, with business investment falling 17 per cent and unemployment reaching 6.5%.

Some of the measures announced in today’s budget which are hoped to both stimulate the economy and recoup some of the losses are outlined below:

• $18.2 billion capital program in 2009/10 - spending about $2,083 per person. This is an increase from $17 billion in 2008-09.
• 25 per cent payroll tax rebate on eligible apprentice and trainees
• Installment payment option for land tax
• Increase in first-home buyer vacant land transfer duty concession threshold from $150,000 to $250,000
• Fuel subsidy of 8.3 cents per litre ends July 1
• Program of asset sales, including Queensland Motorways, the Port of Brisbane and Queensland Rail's coal business, planned to raise $15 billion.

The two elements of this budget which we believe will be of greatest benefit to the Queensland property industry are the instalment payment option for land tax and the increase in the vacant land transfer duty concession threshold from $150,000 to $250,000 for first home owners

Both these initiatives are likely to stimulate activity in the new homes and vacant home site sector of the market, which will likely filter activity through to the established home sector also.