The Queensland Government delivered their 2020-21 State Budget on 1 December 2020. While there were no surprises, there are some highlights for the building and construction industry, including capital expenditure, but also some missed opportunities.
Highlights for building and construction
$56 billion has been allocated over the next four years for the capital program.
For 2020-21 this means $14.8 billion; an extra $1.9 billion from the current financial year.
We’ve been calling on the Queensland Government to increase capital spending to reach the 25-year average as a proportion of gross state product (GSP). This budget is a large step towards that goal.
Also important for the construction industry is how much of the total spend is allocated to new public sector buildings. There’s been a significant in increase in this year’s budget for education and education and health facilities, which is welcome.
The transport sector continues to attract the lion share of capital spending securing a massive $2 billion increase on last year, bringing the total to $5.9 billion.
The proportion of spending that is allocated for south east Queensland continues to grow to support of the areas of high population growth. The government’s flagship projects, Cross Rail and upgrades to the M1 Pacific Motorway, will draw a large proportion of this allocation.
The government has provided a detailed list of projects for each region on their budget website.
$756 million of the 2019-20 budget was left unspent, which is disappointing given the impacts of COVID this year, when it is most important.
Repeated underspends have left $2.2 billion worth of promises un-spent over the past four years.
Regional Boost & Household Resilience Program
The Regional home building boost grant has not been returned and the First Home Owners’ Grant will remain at $15,000.
Funding for the Household Resilience program has also not been topped up. With the current funding quickly oversubscribed this will leave many Queenslanders without assistance to upgrade their homes to better prepare for cyclones.
$45.5 million has been allocated to rectify the combustible cladding on the Princess Alexandra Hospital in Brisbane. This allocation is an indication of the cost of the looming problem when the Safer Buildings program culminates in May 2021, with affected property owners having their engineer’s report complete.
Key budget forecasts
- Queensland’s economic growth has been nonexistent during COVID but is expected to return in 2021-22, moving up to 3.5 percent and settling at a respectable 2.75 percent over the following two years.
- The state’s unemployment rate will remain elevated during 2021-22 (7.0 percent) and return to pre-COVID level in 2022-23.
- Queensland is forecasted to benefit from better than expected population growth, only falling 1 per cent for two years, before beginning to move up again in 2022-23 (1.24 per cent).