Proposed QLeave increase

17 May 2019

The state government is proposing several changes to increase the QLeave levies.

You may have already received a letter from the government asking for your input.

Responses are due 30 May 2019.

The proposed changes are intended to put the Portable Long Service Leave (PLSL) fund on a sustainable footing and provide dedicated funding for mental health and suicide prevention programs for the building industry.

For the most part the proposed changes will undo Newman government changes in 2014.

The following table is a summary of the current levies and the levies being proposed by the government.

Training levy

PLSL levy

WHS levy

COMBINED LEVY

Current

for projects $150K -$1.161B
(excluding GST)

0.1%

0.25%

0.125%

0.475%

Proposed

for all projects over $150k
(including GST)

0.1%

0.3%

0.13%

0.53%
+  levy paid on GST

Master Builders is considering its response and would welcome your feedback.

Current thinking is that we would recommend the following to the government:

Projects of all sizes (over $80k) should pay the existing rate 

Spreading the load will help maintain the sustainability of the PLSL scheme without unduly affecting the affordability of individual projects. The 2014 decision to raise the threshold from $80,000 to $150,000 and to provide concessions for major projects, mostly mining/LNG projects, was unfair.

No increase to the PLSL levy

While we recognise that the scheme is under pressure, increasing the levy will simply increase the cost of construction. Scrapping the current exemption/concession for small and major projects will go some way towards ensuring the PLSL scheme remains sustainable.

Do not include GST in the project value

This is a tax on a tax and will unfairly inflate the total project costs. GST is not a project cost as it will be offset by an input tax credit. The 2014 changes were intended to clarify an anomaly and should stand.

No additional WHS (suicide prevention) levy

The current Workplace Health and Safety levy generates around $40 million each year. Mental health is an important issue and requires attention; however, there is no case for adding to the current levy. There is plenty of scope to fund this program from the existing levy.

The following table summarises the cost implications of the different proposals.

 

Project Size

 

$100k

$300K

$1M

$200M

$2B

$6B

Current levy paid
(levy 0.475%; excludes GST; discount/exemption for major projects)

$0

$1,425

$4,750

$950,000

$4,750,000

$0

Government’s proposal
(levy 0.53%; includes GST; no discount/exemption for major projects)

$0

$1,749

$5,830

$1,166,000

$11,660,000

$34,980,000

Change under
Government's Proposal

$0

$324

$1,080

$216,000

$6,910,000

$34,980,000

Alternate proposal
(levy 0.475%; excludes GST; same rate for all projects over $80k)

$475

$1,425

$4,750

$950,000

$9,500,000

$28,500,000

Change under alternate proposal

$475

$0

$0

$0

$4,750,000

$28,500,000

Master Builders will also be making it clear to government that any change needs to be made with enough advance notice for it to be reflected in construction contracts.

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