RECONSTRUCTION AND RESOURCES RULE STATE BUDGET

Written on the 14 June 2011

RECONSTRUCTION AND RESOURCES RULE STATE BUDGET

THE reconstruction effort and the resources sector are set to power the state’s next big boom and stimulate growth of the Queensland economy at a faster rate than any other state in the nation – according to State Treasurer Andrew Fraser.

Leader of the LNP Campbell Newman has hit back at the Budget though, saying the Bligh Government’s decision to slash the principal place of residence concession will result in stamp duty rising from $5250 to $11825 on the average $400000 home.

Fraser says Treasury forecast growth of five per cent next year and five and a quarter per cent in 2012-13.

"The lingering effects of the GFC and now the natural disasters have smashed our economy, but now the place is ready for take-off,” he says.

"Reconstruction, resource investment - particularly the LNG boom - and surging business investment is predicted to see growth clock in at 5 per cent next year, the fastest growth in five years.

"Combine that with Government investment in two struggling areas of the economy in this budget - housing and tourism and the elements are in place for the next generation of Queensland prosperity."

The Treasurer says returning confidence was highlighted in the business investment forecasts, with nation-leading growth of 27.75 per cent expected next year and record export volumes growth of 10 per cent.

"Business investment has made a stunning recovery - from a massive contraction in 2009-10 during the GFC, to an expected increase of 13 per cent this year, before hitting an astronomical 27 and three quarter per cent next year, and forecast to remain above 20 per cent the year after.

"That's a vote of confidence in our economy and our prospects as a destination for long-term investment."

Fraser says the booming economic growth will also fuel strong jobs growth and a strengthening budget position.

"Treasury expects employment to increase by 3 per cent next year, while the unemployment rate is tipped to decline to 5 per cent next year and then dip below 4 and three quarter per cent in 2012-13.

"That's 140,000 new Queensland jobs over the next two years. The unemployment rate fell to 5 and half per cent in 2010-11 from 5.7 per cent despite a tough three years for the economy.”

Fraser says the Government remains on track to reach a surplus in 2015-16.

"This year, Queensland's debt is more than $17 billion less than it was forecast to be two years ago,” he says.

"We will also see the forecast deficits across the forward estimates decreased by more than 30 per cent to be $6.75 billion over the next four years, compared to the mid-year update.”

LNP leader Campbell Newman believes home buyers will be hurt right throughout the state though as stamp duty has skyrocketed 125 per cent.

“The housing market is already in the doldrums, and Labor has delivered the industry a king hit,” he says.

“This stamp duty slug will put the home ownership dream out of reach for many Queenslanders already tightening their belts to pay for Labor inflicted cost of living increases for electricity, water and rego.”


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