Australia: QLD State Budget 2022-2023

The 2022-23 QLD State Budget was handed down by Treasurer, Cameron Dick, on 21 June 2022.

In his speech, the Treasurer announced a budget surplus of $1.9 billion for the 2021-22 financial year. Despite the ongoing impacts of COVID-19 and floods, the Queensland economy is forecast to grow by 3% in 2021–22, and then average ongoing growth of 2.75% per annum over the rest of the forward estimates.

The budget outlines the biggest capital program investment since 2010 of $59.1 billion over 4 years, which is expected to support 48,000 jobs in 2022–23. The budget also provides $6.8 billion in concessions to ease cost of living pressures for Queenslanders in 2022–23. This includes a $175 Cost-of-Living Rebate to help manage electricity costs. A summary of the key budget measures is provided below:

Payroll Tax – relief for small and medium sized businesses Many small and medium businesses will receive payroll tax relief by increasing the payroll tax deductions available to employers with annual Australian taxable wages between $1.3 million and $10.4 million. These changes are proposed to apply to payroll tax liabilities arising on or after 1 January 2023.

The following table from the Budget Strategy and Outlook 2022–23 illustrates the estimated payroll tax savings for eligible businesses:

Table 4.3: Tax savings for indicative annual taxable wages

Under the current regime, employers, or groups of employers, with annual Australian taxable wages between $1.3 million and $6.5 million can claim a deduction from their taxable wages, which phases out at a rate of $1 for every $4 of taxable wages above the $1.3 million threshold. The payroll tax relief measures extend the deduction to $10.4 million in annual Australian taxable wages (increased from the current ceiling of $6.5 million). This reflects an increase in the phase out rate of the deduction from $1 for every $4 to a rate of $1 for every $7 of taxable wages above the $1.3 million threshold.

Payroll tax - Mental health levy – applicable to large employers

Queensland will impose a new mental health levy on big business to meet demands for mental health services. The levy will apply to payroll tax liabilities arising on or after 1 January 2023 and will be applied to large employers, or groups of employers, with annual Australian taxable wages over $10 million. An additional levy will be applied to taxable wages over $100 million.

The mental health levy will be applied as follows:

• a 0.25% levy on the annual Australian taxable wages of employers, or groups of employers above $10 million
• an additional 0.5% levy on the annual Australian taxable wages of employers, or groups of employers, above $100 million.

The levy will only apply to the portion of the wages above the respective taxable wage amounts (i.e. on a marginal basis).

Payroll tax rebate for apprentices and trainees

The 50% payroll tax rebate for wages paid to apprentices and trainees will be extended for 12 months until 30 June 2023.

Cost of living

• Queenslanders will automatically receive a $175 Cost-of-Living Rebate on their next power bill. This is at a cost of $385 million to the budget.
• $541.3 million in 2022–23 will be allocated for government managed housing rental rebates, supporting approximately 54,700 low-income households.
• $2.1 billion in 2022–23 will be allocated for general transport concessions for bus, rail and ferry services.
• $1.3 billion in 2022–23 will be allocated for energy concessions to provide affordable power to households and businesses.
• Up to $295 per annum for secondary school students to assist with the cost of textbooks and learning resources.

Foreign acquirer duty

Retirement visa holders will be exempt from additional foreign acquirer duty when purchasing their principal place of residence on or after 1 January 2023.

Racing Levy

A 5% racing levy will be applied to the betting tax rate and bonus bets will be incorporated into the calculation of betting tax for liabilities arising on or after 1 December 2022.

The Budget also includes significant investments in infrastructure, health and education.

This article is issued as general commentary - please contact us about your specific circumstances.