FY25 Budget | Analysis for Queensland Businesses
The 2024–25 Queensland Budget delivered a strong cost of living focus, with a record $11.218 billion in concessions to households. Significant investment has also been made in infrastructure through the Big Build with over $107.262 billion worth of infrastructure investment over the next four years to meet the needs of a growing population.
The State Budget provided for some measures to support businesses, and these are welcomed. However, for Queensland businesses, this year’s State Budget was a missed opportunity to provide genuine and direct relief to Queensland businesses who are struggling with day-to-day operating challenges, and it did not lay the foundations for long-term business confidence.
The State Budget provided some measures for businesses - energy rebates of $650, a temporary freeze on government fees and charges and registration discounts on some vehicles – and these measures are all welcomed.
Business Chamber Queensland also acknowledges the initiatives in the Small Business Strategy which was released earlier this month and we’re looking for more details on how businesses of all sizes can benefit from infrastructure projects in the Big Build.
But these measures don’t alleviate the increasing, compounding and persistent business pressures being felt every day nor do they provide long-term and systematic economic reform.
Business Chamber Queensland is committed to advocating for Queensland businesses to ensure they are supported to manage day-today and thrive long term.
See the State Budget analysis for Queensland businesses below.
Advocating for Business
We’ve listened to the experiences and concerns of businesses across Queensland. Ahead of the State Budget release, Business Chamber Queensland submitted the priorities that were needed to provide relief from day-to-day challenges and as well as the transformational change required to support the growth of Queensland businesses across Queensland.
Business Chamber Queensland’s State Budget submission relied on direct business feedback, including insights and data from our Pulse Survey of Business Conditions, Efficient Regulation Report, Future of Work Report and Sustainability Maturity research, to identify key priorities for Queensland businesses.
STATE BUDGET BUSINESS ANALYSIS
Contents
- Budget Numbers
- Business Measures
Energy Rebate
Light Vehicle Registration Discount
Temporary freeze on government fees and charges
Payroll Tax Rebate for Apprentices
Business Taxation
Small Business Strategy - Missed Opportunities
Relief from historically high operating costs
Reducing Regulatory Burden
Reducing payment timeframes and improving on-time payments
Business resilience
Future business success - Queensland Economic Outlook
- Budget Reply
- Summary
1. Budget numbers
- Budget and surplus: The 2024–25 Queensland Budget focuses on cost-of-living support and infrastructure. Higher business tax revenues are expected to drive an operating surplus of $564 million in 2023–24.
- Revenue and expenses: Revenue for 2023–24 is $89.059 billion, with expenses at $88.495 billion. A $2.631 billion deficit is forecast for 2024–25, improving to surpluses of $887 million in 2026–27 and $2.027 billion in 2027–28.
For business
- $650 rebate off electricity bills
- 20% discount on light vehicle registration
- Freeze on all government fees and charges for 2024-25 FY
- $19.7m to deliver the Queensland Small Business Strategy
- $27.1b in infrastructure
2. Business Measures
2.1 Energy Rebate
205,000 eligible Queensland small businesses will receive $650 off their electricity bills in 2024–25. To be eligible to receive this, a business must be based in Queensland, on a separately metered business tariff with an electricity retailer (not a business operating from home) and consuming less than 100MWh per year.
2.2 Light Vehicle Registration Discount
The registration fee and traffic improvement fee components of motor vehicle registration for all light vehicles will be reduced by 20 per cent for 12 months. It will not include registrations under the national heavy vehicle regulator.
Temporary freeze on government fees and charges
The State Government has set the Government Indexation Rate (GIR) for 2024/25 to zero (frozen). This means there will be no increase in the cost of government fees and charges. Some of these include but are not limited to:
- Emergency Management Fee
- Motor Vehicle Registration Fee (including traffic management and registration fee)
- Commercial Fishing Licence Fees as part of Future Fisheries
- Queensland Wildlife Service Tour fee and Access Permits
What this means for business
We called for an extension of the Energy Rebate for small businesses, and welcome this State Budget measure, alongside a temporary freeze on government fees and charges and registration discounts on some vehicles. However, with business input costs at record highs, there is still work to do to alleviate the increasing, compounding and persistent business pressures.
2.3 Payroll Tax Rebate for Apprentices
The 50 per cent payroll tax rebate for wages paid to apprentices and trainees will be extended for 12 months until 30 June 2025. In addition to apprentice and trainee wages generally being exempt from payroll tax, this rebate provides additional support for businesses supporting youth employment and businesses who employ trainees and apprentices. It is estimated this initiative will result in tax relief of $54.9 million for Queensland businesses employing trainees and apprentices in 2024–25.
What this means for businesses
This measure is welcomed as it supports on-the-job skills development and supports Queensland businesses in accessing the workforce they need.
2.4 Business Taxation
Land Tax
The surcharge rate of land tax imposed in addition to general land tax rates for foreign companies, trustees of foreign trusts, and absentees will be increased from 2 per cent to 3 per cent from 30 June 2024. It is estimated this measure will result in additional taxation revenue of approximately $330 million over the 4 years ending 2027–28. When combined with additional taxation revenue from the increased foreign acquirer duty (AFAD) rate, these measures will offset the cost of extending the first home buyer concessions.
Foreign Acquirer Duty
Additional Foreign Acquirer Duty, which is levied on direct and indirect purchases of residential property in Queensland by foreign owners, will increase from 7 per cent to 8 per cent from 1 July 2024. This measure is estimated to result in additional taxation revenue of approximately $90 million over the four years ending 2027–28.
What this means for business
Our State Budget submission called for further Payroll Tax reform and more substantial relief from operating costs including energy prices, insurance, stamp duty and land tax. An opportunity for permanent business condition improvement has been missed.
Big Build
Increased investment in the capital program to support infrastructure investments is welcome.
This includes:
- Boosting the health system capacity
- Decarbonising the state’s energy system
- Preparing for the 2032 Olympic and Paralympic Games
- Delivering major transport infrastructure investment
The government’s infrastructure Big Build provides $27.1 billion in 2024–25, the state’s largest single year dollar infrastructure investment on record.
Key infrastructure projects include:
- Delivering on the Queensland Energy Jobs Plan by investing in new wind, solar, storage, and transmission: $26 billion over the four years to 2027–28
- Queensland Train Manufacturing Program: $786 million
- Construction on Coomera Connector (Stage 1): $650 million
- Continuing construction work on Cross River Rail: $513.6 million
- Logan and Gold Coast Faster Rail project: $500 million
- Continuing Gold Coast Light Rail (Stage 3): $308.2 million
- Pre-construction works for a new Gympie Road Bypass Tunnel between Kedron and Carseldine: $318 million
- Supporting high priority disaster resilience and mitigation projects over 3 years: $100 million
- New Direct Sunshine Coast Rail Line between Beerwah and Maroochydore (Stage 1): $5.5 billion
What this means for business
Business Chamber Queensland has been calling for greater investment in business enabling infrastructure and welcomes this increased investment. Transport infrastructure will enable commerce to occur more efficiently delivering better productivity. Queensland is a big state so transport infrastructure is critical. We also called for State Budget measures to encourage successful bidders to partner with other businesses throughout their supply chains to tender for government procurement. This promotes a model of mutual benefit and partnership play a pivotal role in delivering large-scale projects. Procurement strategies for the Big Build must ensure businesses are front and centre of these opportunities, to enable businesses of all sizes and in all regions can be a part of this increased infrastructure spend.
2.5 Small Business Strategy
Earlier this month, the Queensland Small Business Strategy was released, and this State Budget provides additional funding of $19.7 million over three years to the Department of Employment, Small Business and Training to support the delivery of the strategy. This forms part of a total investment of over $250 million over three years to deliver a range of actions, including:
- Refreshed small business grants program
- Access to free training under the Free TAFE program
- A focus on increasing procurement opportunities for small businesses
- Delivery of the ecoBiz program to help small businesses save money on energy, water and waste
- New guidelines to minimise disruption during infrastructure works
- Additional funding for grants to support businesses to implement workforce solutions
- Extenion of the Workforce Evolve Program
- New investment in cybersecurity
- One-on-one support for small business focused on mental health and financial security
- Deliver social enterprise grants and support sector partnerships
What this means for business
We welcome the Small Business Strategy, which recognises the Chamber’s recommendations to reduce pressure on small businesses and support workforce needs - but there is still more to be done. Business Chamber Queensland has been calling on the government to respond to the compounding pressures on the small business community and is pleased to see some of these issues addressed in the Strategy including procurement, cyber security and financial counselling.
3. Missed Opportunities
As part of our State Budget submission, we called on the Queensland Government to respond to the mounting pressures on businesses by providing operating cost relief, reducing regulatory burden, improving workforce restrictions and enhancing productivity. We also identified the priority areas needed to ensure the long-term success of the business community.
3.1 Relief from historically high operating costs
We know businesses are experiencing record-high operating costs, the same cost-of-living issues in the community. The State Budget outlines some temporary relief through energy rebates but misses opportunities for long-term structural support, such as reducing insurance costs, payroll tax, stamp duty, and land tax – all of which were proposed in the Chamber’s 2024/25 State Budget Submission
3.2 Reducing Regulatory Burden
Our latest Efficient Regulation Report revealed that inefficient regulatory requirements significantly constrained business growth with both the time and cost of complying with inefficient regulation doubling in the past two years. We called for the State Government to commit to a series of measures to reduce the regulatory burden, including open and more regular consultation, as well as the reduction of duplication across all levels of government, a reduction in the frequency of reporting requirements, and the establishment of a single agency to manage regulatory matters. While we are pleased to see a recognition of the issue in the Small Business Strategy, there was no meaningful funding commitment to cut red tape in this State Budget.
3.3 Reducing payment timeframes and improving on-time payments
We know that when it comes to the day-to-day operations of running a business ‘cash is king’. In response to this, we called for initiatives like a reduction in government payment times to 10 business days for small business, an increase in the On-Time Payment Policy to include all businesses, and the introduction of penalty interest. These issues were not addressed in this year’s State Budget.
3.4 Building productivity and resilience
Based on feedback from businesses across the state, our submission called for a range of measures to enhance business-enabling infrastructure including investments to enhance digital connectivity and housing, particularly in regional and remote communities.
We acknowledge the important work the Government is doing to address chronic housing shortages and regular and transparent reporting on the progress of housing projects is an important accountability measure on which we will continue to seek. We were pleased to see an uptick in critical infrastructure spending but note a drop in the forward projections. We will continue to advocate for ongoing investments in critical infrastructure, particularly as our population continues to grow and we approach the Games in 2032. We will also be driving procurement outcomes for businesses and ensuring that Queensland businesses are front and centre for any opportunities that come from infrastructure spend.
3.5 Business resilience
We received wide industry and business support for our recommendation that funding be included in this State Budget to support small and medium businesses to access accountancy and business management software, including funding for training. This was recognised by the business community as a measure that would reduce operating costs and increase financial literacy. There was no support for this initiative in this State Budget.
Nor was there support to develop a Business Resilience Framework that would enable the development of a holistic system designed to equip businesses with the strategies and tools needed to navigate unforeseen challenges and thrive in an ever-changing economic environment.
3.6 Future success
The Chamber’s 2024/25 Budget Submission called for a range of initiatives to support Queensland businesses to capitalise on the opportunities ahead in our State. This included partnering with the government to deliver the MyGames Plan Tool which will enable Queensland businesses to be ready to capitilise on the opportunities that will come from Q2032 procurement., We also asked for initiatives to enhance export readiness and partnership capability. We recognise initiatives in the State Budget to support Queensland exporters with infrastructure upgrades, including plans to meet industry requirements for export facilities through the North Queensland Bulk Ports Corporation. These upgrades, when completed, will enhance exporters' ability to take their products worldwide.
However, we know businesses need support to be export-ready with advice on how to identify opportunities, market entry strategies, export market plans, logistics and regulatory, legal, and free trade agreements. We will continue to work with the government to address these issues.
4. Queensland’s Economic Outlook
4.1 Fiscal Position
Budget and Surplus
The 2024–25 Queensland Budget focuses on cost-of-living support and infrastructure. Higher business tax revenues are expected to drive an operating surplus of $564 million in 2023–24.
Revenue and Expenses
Revenue for 2023–24 is $89.059 billion, with expenses at $88.495 billion. A $2.631 billion deficit is forecast for 2024–25, improving to surpluses of $887 million in 2026–27 and $2.027 billion in 2027–28.
Public Sector Borrowing
Borrowing will rise from $102.820 billion in 2022–23 to $171.986 billion by 2027–28, increasing the financial burden on businesses.
Savings Plan
A $3 billion savings plan over four years aims to manage the budget. The net operating position is expected to improve from 2025–26 as cost-of-living relief measures are reduced.
4.2 Queensland's Economy
Economic Growth
Economic growth is forecast at 3% for 2023–24 and 2024–25, supported by population growth, despite national growth slowing to 1.3% in 2024.
Household Pressures
Increased mortgage rates and cost-of-living pressures are slowing consumption growth, affecting domestic economic conditions.
Unemployment and Inflation
The unemployment rate is projected to rise to 4.5% in 2024–25. Inflation is expected to ease from 7.3% in 2022–23 to 4% in 2023–24 and 2% in 2024–25.
Population Growth
Population growth is projected to be 2.5% in 2023–24, easing to 1.5% in 2024–25 and 2025–26, driven by high net overseas migration.
5. State Budget Reply
The State Opposition has now provided its Budget Reply speech. We acknowledge several measures in the Opposition’s Reply speech which relate to business., In particular, we welcome their commitment to reduce government payment times with an On-Time, Every-Time Payment Guarantee which commits to payment times of 5-business day terms for small and family businesses and immediate payments for invoices under $10,000. A similar measure was specifically called for in our pre-budget submission and we’re pleased the opposition has adopted this proposal.
Further to this, proposed simplified procurement process with standardised contracts, smaller tender amounts and streamlined tender processes to make government tenders accessible to small businesses is also a positive announcement.
Additionally, the proposal for a New Small and Family Business Innovation Pathway to directly engage Queensland small and family businesses for short-term initiatives up to $1 million, to solve specific problems or improve government service delivery, trying new and in innovative ideas is welcomed. A key pillar in our advocacy efforts is to emphasise the importance of co-designing solutions and this initiative is also welcomed.
However, we also note a lack of new cost of doing business relief mechanisms announced by the Opposition but acknowledge the Opposition’s support of the temporary $650 energy rebate to eligible small businesses and support for other cost of living relief measures.
6. Summary
Businesses wanted to see a business-friendly State Budget. We advocated for funding to support a broad range of initiatives to foster an environment that gives every business, in every industry, across every part of the state, the confidence they need to invest in the future and thrive.
This State Budget falls short.
We will continue to proactively advocate on behalf of the Queensland business community to relieve the current day-to-day pressures of doing business, while driving long-term systemic reform.
There is enormous opportunity ahead in our state, particularly as we look towards 2032 and beyond. It is our objective to ensure that every Queensland business has the right business environment to be able to thrive.