The Queensland Government delivered their 2021-22 State Budget on 15 June 2021. While there were no surprises, there are some highlights for the building and construction industry, including capital expenditure.
Builders have welcomed the solid capital works spend outlined in today’s 2021-22 State Budget – but the threat of additional red tape and the continued lack of a visible pipeline of work has left the industry hungry for more.
With over 230,000 Queenslanders employed in building and construction, the industry continues to keep the cogs of the economy turning, generating $28 billion for the state’s coffers – close to one tenth of the total.
The industry is continuing to deal with labour and materials shortages and cost hikes resulting from welcome but unprecedented demand driven by government stimulus, such as HomeBuilder and the Regional Home Building boost, ultra-low interest rates and strong interstate migration, leaving the residential housing sector in disarray.
Highlights for building and construction
$52 billion has been allocated over the next four years for the government’s capital program. This is down from the $56 billion promised in last year’s budget.
For 2021-22 this means $14.7 billion has been allocated, which is about on par with the current financial year.
We’ve been calling on the State Government to increase capital spending to reach the 25-year average as a proportion of gross state product (GSP). They continue to fall just short of this goal.
Also important for the construction industry is how much of the total spend is allocated to new public sector buildings.
While there will be significant spend on new hospitals, housing and schools; transport continues to attract the lion share of capital spending – half the total capital allocation at $6.4 billion.
The proportion of spending that is allocated to the regions has increased this year, moving up to 39 per cent of the total allocation.
The government has provided a detailed list of projects for each region on their budget website.
Some highlights include:
- $1 billion for the Housing Investment Fund to drive new housing supply and $1.9 billion over four years to boost the supply of social housing and upgrade existing social housing
- $1.1 billion for the Rockhampton Ring Road
- $913.7 million for 10 new state schools
- $148 million for the maintenance and minor infrastructure projects by regional councils
- $74 million for the expansion and refurbishment of the Cairns Convention Centre.
- $25 million from the Resources Community Infrastructure Fund to support post-COVID recovery in the regions.
- $20 million to improve disaster resilience and reduce the cost of future reconstruction of public assets damaged by natural disasters and $14.4 million to improve safety and natural disaster resilience across the state.
Key budget forecasts
- Queensland’s economic growth was non-existent during COVID (down 0.7 per cent) but rebounded strongly over the 2020-21 year (up 3.25 per cent). It is expected to level out to 2.75 per cent for the remainder of the four-year projections.
- The state’s unemployment rate surged during 2019-20 (7.0 per cent) but has already returned to pre-COVID levels and is expected to fall further over the coming four years.
- Queensland’s forecasted population growth has taken a significant hit with the closure of international borders. We have been fortunate in being able to offset some of this by significant migration from the other states. On balance, population growth is expected to be a muted 1 per cent to 1.5 per cent over the coming four years.