‘Pragmatic’, ‘middle of the road’, ‘boring’: the 2018-19 Federal Budget has been received with a yawn, but when it comes to the battle of the states, Queensland is considered an overall Budget winner. With a federal election looming and the Sunshine State’s status as a battleground state, it is not surprising that the government is splashing the cash in Queensland.
The state’s development industry, infrastructure spending, company tax cuts, research and development, and drone safety were all featured in Scott Morrison’s Budget, and all have the potential to create development winners and losers.
Infrastructure – Opening up the Sunshine Coast
While Victoria took home the lion’s share of infrastructure spending, Queensland was not overlooked, with $5.2 billion newly earmarked for projects across the state.
Making up this $5.2 billion is $3.3 billion for upgrades along the Bruce Highway, $1 billion for the M1 Pacific Highway, $170 million for the Cunningham Highway – linking the Darling Downs and Ipswich, $64.2 million for upgrades on the Warrego Highway and additional money via a $1.5 billion fund for Northern Australian roads.
But the Budget promise with arguably the greatest potential to deliver opportunity to Queensland developers is the Sunshine Coast rail line duplication, which received $390 million of funding. Sections of the current line are over 100 years old, significantly slowing commuter trains and restricting freight access to the region. The significance of these restrictions was recognised by Infrastructure Australia earlier this year when the organisation placed the project on their Priority List.
The line duplication is set to cut commuter travel times from approximately two hours down to just 45 minutes, making it more attractive for commuter belt development. Additionally, new stations and upgrades to existing stations to increase freight capacity are set to make the region more attractive to industrial and commercial development.
Unsurprisingly, the Cross River Rail project in Brisbane was conspicuously absent from the Budget. The project has been a longstanding battleground between the Labor State government and the federal Coalition. Instead, Morrison has pledged $300 million for the LNP-controlled Brisbane City Council’s Metro transport project.
R&D Business Park Potential
It may be a long bow to pull, but real estate agencies are suggesting that business park development may benefit from the Budget incentives to encourage investment in research, science and technology.
The investment in research and development includes an additional $1.9 billion over 12 years for national research infrastructure. This investment may benefit commercial projects but with current high vacancy rates, this may take the full 12 years of funding to materialise into significant development opportunity.
Company tax cuts
The Budget reiterated the government’s 2016 pledge to cut the corporate tax rate from 30% to 25%, but this measure is still dependent on if the government can pass the rate cut through the reluctant upper house. Smaller businesses also received a tax benefit with instant asset write-offs for small business purchases under $20,000 extended.
With the increasingly economical access to drone technology, drones are being used throughout the development process, from sales photography through to construction safety management. Mr Morrison’s budget addressed the growing concerns about privacy and safety around the use of drone technology, pledging $2.9 million to the Civil Aviation Safety Authority (CASA) for this year. This use may be curtailed or made more expensive.
The cash splash will be used by CASA to increase safety standards and compliance measures for recreational and commercial use drones. This could result in licences becoming more expensive, or further restrictions in areas where drones may be flown.
Time will tell
Only time will tell if the government work with the upper house and the State Labor government will deliver these budget promises.