On Tuesday 11 September 2012, the Queensland Government handed down its State Budget for the coming year.
The purpose of this State Budget Tax Brief is to provide a brief snapshot of the key economic initiatives and State taxation changes that we anticipate will affect our clients.
Deficit – for 2012/13, but projected Surplus by 2013/14
There is a projected deficit of some $10.768 Billion for 2012/13. However, this deficit is expected to return to a small surplus by 2014/15 as a result of the fiscal measures being taken.
Target of 4% Unemployment over 6 years
Unemployment is targeted to recover, with the Government aiming for a reduction down to 4% over a six year period.
'Home Owner' Concession reinstated
The 'Home Owner' Transfer Duty Concession was removed from 1 August 2011 under the previous Government. The current Government had already announced its reinstatement which applies from 1 July 2012 and provides a saving up to $7,175 on the cost of a home.
$15,000 First Home Owner Construction Grant
The current $7,000 First Home Owner Grant (applying to new and existing properties) will be abolished from 12 September 2012. It will be replaced by a construction grant available for first home buyers purchasing a newly constructed or off-the-plan property (valued under $750,000).
The Government has already previously announced they will Scrap sustainability declarations and other unnecessary red tape for the building industry.
Transfer duty threshold and rate increases
From passage of the amending legislation, the threshold for the highest marginal rate of transfer duty will increase from $980,000 to $1m. At the same time, the rate applicable to the new higher threshold will increase to 5.75%.
Coal royalties increase
From 1 October 2012, the rate for coal royalties will be increased to 12.5% on the value per tonne between $100 and $150 and to 15% thereafter. The rate below $100 per tonne is not changing. However, there is a guarantee of no change to the royalty rates for coal for 10 years from 1 October 2012.
Much of the additional resources industry taxes raised will be used to fund infrastructure in regional Queensland including an upgrade of the Bruce Highway.
Farm-in Duty exemption
The grant of an interest in an exploration permit under a farm-in arrangement will be exempt from duty.
A standalone Department of Agriculture will be reintroduced for the first time since 2009.
$7.6 million will be spent on agricultural and horticultural research to increase productivity of key export sectors.
$4.8 million will be set aside for research to develop Queensland as the food bowl of Asia.
Pubs and Clubs
Gaming machine tax changes
The Qld Government will introduce an additional tier in the gaming machine tax rate structure that will increase the gaming machine tax payable by clubs where the monthly metered win is more than $850,000.
The payroll tax threshold will be increased from $1 million to $1.1 million in 2012-13, with further increases of $100,000 each year until it reaches $1.6 million on 1 July 2017.
Further information can be found on the Queensland State Government Budget website.
This State Budget Brief has been produced based on our interpretation of the 2012/2013 Queensland Government Budget papers and other materials. In most cases, no legislation has been passed at the date of writing this brief, so the announcements and the intended date of application should be viewed as a guide to intended legislation only and not relied upon.
Please contact Hanrick Curran's tax partner Jamie Towers with any queries in this regard on 07 3218 3900
For a pdf version of this tax update please click here.