State Budget with strong elements, but also risk - CCIQ
The Chamber of Commerce and Industry Queensland (CCIQ) welcomes the Palaszczuk Government’s second State Budget and the small business-friendly elements.
CCIQ Director of Advocacy Nick Behrens acknowledged many positive aspects in the 2016-17 State Budget delivered by Treasurer Curtis Pitt today.
But, he added, there were also a number of risks which would need to be dealt with by the government to improve Queensland’s economic position ahead of the next State Election in 2018.
“The context to today’s State Budget is an economy doing it tough at present with Queensland’s domestic economy in difficulty, contracting over the past two years and the unemployment rate on the rise,” Mr Behrens said.
“Queensland needed a Budget that doubled double down on efforts to help the Sunshine State transition from the resources boom to a more diversified economy.
“We needed a Budget that recognised the importance of small business.”
Mr Behrens said the state’s 405,000 small businesses would support many elements that were delivered by the Treasurer.
“It balances the books, has a good degree of expenditure restraint across forward estimates, while at the same time invests in infrastructure and innovation.
“The Budget confirms an improving outlook for the Queensland economy with Gross State Product growth increasing from 3.5 per cent in 2015-16 to 4 per cent in 2016-17.
“This favourable outlook aligns with CCIQ views on an improving economic picture, albeit with a strong reliance on exports and stubborn and only modest domestic growth.
“In respect to the state’s fiscal position, CCIQ is very supportive of the operating surpluses of $152 million in 2015-16 and $867 million in 2016-17.
“This aligns with business expectations for the government to live within its means and spend less than it earns on a recurrent basis.
“CCIQ cautions that there is a high degree of risk associated with the 2016-17 surplus as it relies on 6.9 per cent growth in revenue – something not seen in recent years.
“At the same time, we are also increasing expenditure by 5.5 per cent. So the risk is that we’re spending money we have not yet earned.
“CCIQ is unsatisfied with the progress the government is making on the pay down of debt. Public sector debt across the forward estimates of the Budget will continue to rise and will be an area of concern for credit rating agencies.
“Where this Budget gets it right is in the area of infrastructure and innovation.
“While the $40 billion infrastructure spend over the next four years is on the face of it quite impressive, it does not address the historically low levels of government capital expenditure that Queensland is experiencing at present.
“However, CCIQ is very supportive of the way in which this money is being spent as it is cleverly being spent in regional Queensland, where it will matter most for jobs.”
Mr Behrens said the jewel in the crown is in the area of the government’s Advance Queensland program.
”CCIQ applauds Budget measures to increase Advance Queensland funding – it is a win for small business and start-ups.
“The additional $225 million allocated in the Budget is a significant and positive step towards transitioning Queensland’s economy post the resources boom.
“The Government’s commitment to ensuring innovation remains a key priority for Queensland will see us keep pace with our competitors and boost productivity.”
Mr Behrens said there were definitely hit and misses in the Budget.
“The Budget has strong elements to it, tied to optimistic revenue growth and if the Treasurer pulls it off he will enjoy considerable and well-deserved support from the business community.”