Queensland Budget 2018–19 — What property investors need to know

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Queensland Budget 2018–19 — What property investors need to know

by Sasha Karen | June 12, 2018 | 1 minute read

The Queensland budget has been handed down and there are a few things that investors should keep an eye out for that could raise their property prices.

by Sasha Karen

June 12, 2018

Delivered on Tuesday, the Queensland budget for the 2018–19 financial year has some bits and pieces that could see help improve the profitability of their portfolios, but nothing that directly targets investors.

The key takeaways for investors are increased expenditure on the first home owners’ grant, transport and roads, tourism and mining:

First home owners’ grant

In financial year 2018–19, the Queensland government plans to save $139.7 million to use for capital grants, which will contribute towards:

$139.7 million for the Queensland First Home Owners’ Grant to assist first home buyers entering the housing market.

For Simon Pressley, expert on the Queensland market and managing director and head of research at Propertyology, said that despite the funding, he claims it is a “slap in the face” for anyone who plans to enter the Queensland market.

“If the government genuinely wants to help a Queensland first home buyer, set aside the grant and let the buyer make their own choice from the two million dwellings in Queensland,” Mr Pressley said to Smart Property Investment.

“By saying the grant is only available for brand new properties limits the buyer’s choice to only 2.5 per cent of Queensland’s dwelling stock. Let’s be honest, the policy is nothing more than a sales tool to help the construction industry off-load their products.”

Transport and roads

In financial year 2018–19, the Queensland government plans to spend $4.217 billion on transport and roads:

$543.3 million to continue the Toowoomba Second Range Crossing project, a route to the north of Toowoomba from the Warrego Highway, Helidon to the Gore Highway, Athol;
$472.3 million of 75 new six-car trains for south-east Queensland;
$200 million to widen the Bruce Highway to six lanes;
$115 million to construct stage one of the Mackay Ring Road;
$89.2 million towards a new statewide public transport ticketing system;
$70 million for more lanes on the Pacific Motorway between MudgeerabaMudgeeraba, QLD Mudgeeraba, QLD and Varsity Lakes;
$68 million for a three kilometre upgrade of the Ipswich Motorway between Granard Road, Rocklea and OxleyOxley, QLD Oxley, ACT Road, Oxley;
$50 million to upgrade the Pacific Motorway/Gateway Motorway Merge;
$45 billion to widen the Gateway Motorway North to six lanes;
$41.1 billion to widen seals and apply wide centre lines across the Warrego Highway between DalbyDalby, QLD Dalby, QLD and Miles;
$40 million to widen the Bruce Highway between Rockhampton-Yepoon Road intersection and Terranova Drive to four lanes;
$37.7 million to build bridges on the Bruce Highway south of Giru between Horseshoe Lagoon and Palm Creek;
$28.3 million to widen the Bruce Highway from Kate Street to Amuller Street;
$27 million to realign the Peak Downs Highway at Eton Range;
$24.2 million to restore the Marlborough – Sarina Road;
$17.5 million to construct SmithfieldSmithfield, NSW Smithfield, QLD Smithfield, SA Bypass between the Captain Cook Highway at Yorkeys Knob Road Roundabout and McGregor Road Roundabout;
$17.3 million to extend the three metre wide V1 cycleway from Birdwood Road, Holland Park to Gaza Road, Tarragindi;
$17 million to upgrade about nine kilometres of the Pacific Motorway between Eight Mile PlainsEight Mile Plains, QLD Eight Mile Plains, QLD and Daisy HillDaisy Hill, QLD Daisy Hill, QLD;
$15.2 million to widen the Bruce Highway from Collinson Creek in Edmonton to near Wrights Creek and Gordonvale;
$14.4 million to improving the Beerburrum to Nambour section of the North Coast line;
$13 million to seal parts of the Kennedy Developmental Road between Hughenden and The Lynd;
$10.9 million to widen a section of the Capricorn Highway between Rockhampton and Gracemere;
$70 million for infrastructure grants to local governments;
$20.2 million to develop the cycle network Queensland-wide;
$18 million for upgrading Queensland school buses; and
$2 million for school transport-related infrastructure upgrades.

Gold Coast waterways will also see $8 million funding, which contribute towards:

$4.9 million for dredging navigational channels and improving accessibility and quality of waterways information;
$2.7 million for improving to Doug Jennings Park facilities, Sand Bypass Jetty Deck and Gold Coast Seaway Sand Bypass System; and
$38,000 for improving boating infrastructure, such as boat ramp and pontoon upgrades.

Queensland Rail is set to see $587 million in funding, which contribute towards:

$43.3 million to upgrade station accessibility at a number of stations, which include Strathpine, Boondall, MorayfieldMorayfield, QLD Morayfield, QLD, Southbank, Dakabin, Cannon Hill, Buranda, FairfieldFairfield, NSW Fairfield, VIC Fairfield, QLD, AlbionAlbion, QLD Albion, VIC Albion, QLD, East Ipswich and Loganlea stations;
$35.4 million to implement the European Train Control System – Inner city;
$35.3 million to support the delivery of the New Generation Rollingstock;
$21.9 million to upgrade the capacity of the North Roast Rail line;
$14.7 million to upgrade Brisbane’s Central Station;
$12.4 million to upgrade park and ride facilities at SalisburySalisbury, SA Salisbury, QLD, Darra, Lawnton, Lindum, Geebung, VirginiaVirginia, QLD Virginia, SA and SpringfieldSpringfield, NSW Springfield, QLD Springfield, QLD Springfield, NSW Central stations;
$9.5 million to continue upgrades between Brisbane and Toowoomba
$4.1 million to upgrade 1.9 kilometres of the Yeppoon Rail line.

Additionally, $399.1 million will go towards upgrading rail infrastructure, rollingstock, buildings, facilities and other areas, which contribute towards:

$237.4 million towards track infrastructure, civil structures, signalling and other related areas;
$88.8 million towards rail operations, which include rollingstock overhauls, operational facilitites and other related areas;
$53.3 million towards funding to corporate, property and ICT works Queensland-wide; and
$19.6 million towards customer experience, maintain service continuity and network resilience on the Townsville – Mount Isa rail line.

The Far North Queensland Ports Corporation Limited will see $7.5 million in funding this financial year, which will contribute towards:

$2 million to developing the Tingira Street Precinct in Cairns.

Gladstone Ports Corporation Limited will see $85.3 million in funding this financial year, which will contribute towards:

$35.6 million to continue upgrading the RG Tanna Coal Terminal at the Port of Gladstone;
$3.5 million to start land reclamation and drainage works at Fisherman’s Landing; and
$2.8 million to start road infrastructure and concrete remediation works at Barney Point.

North Queensland Bulk Ports Corporation Limited will see $15.1 million in funding, which will contribute towards:

$5.9 million to relocate Mackay Tug Berth Facilities to create a fit-for-purpose berthing facility.

Port of Townsville Limited will see $75.1 million in funding, which will contribute towards:

$44.3 million for continuing preparatory and initial works to widen shipping channels; and
$18.6 million to starting the acquisition of Berth 4 cranes and developing associated cargo terminal areas for future trade growth.

Despite the long list of funding towards transport, Mr Pressley was not impressed with the expenditure.

“There’s nothing that jumps off the page and screams out ‘major economic growth’,” he said.

“While the Second Range Crossing (Toowoomba) and Cross River Rail (Brisbane) projects are important infrastructure projects, they are old news and will barely replace the jobs from recently completed projects like Legacy Way tunnel and Moreton Bay Rail link.”

Tourism and the Commonwealth Games

In financial year 2018-19, the Queensland government plans to spend $34.7 million on tourism and the Commonwealth Games which includes:

$172,000 to upgrade the Carrara Stadium

The Queensland government will also save $34.5 million to use for capital grants, which will contribute towards:

$12.4 million to the Regional Tourism Infrastructure and Experience Development Program;
$10 million for the Great Barrier Reef Island Rejuvenation Package;
$5.8 million to the Great Keppel Island Recovery Package;
$3.1 million to finish works on various Gold Coast 2018 Commonwealth Games venues to see them being used past the games, which include the Gold Coast Hockey Centre, BelmontBelmont, QLD Belmont, VIC Belmont, NSW Belmont, WA Belmont, QLD Shooting Centre, Carrara Sports and Leisure Centre and the Carrara Indoor Stadium;
$2.2 million to upgrading and extending the Australian Workers Heritage Centra and Wanpa-rda Matilda Outpack Education Centre at Barcaldine;
$524,000 to the Mount Inkerman Nature Tourism Development; and
$413,000 to the Mackay Tourism Visitor Information Centre.

The biggest opportunity, according to Mr Pressley, continues to be the tourism sector.

“Australia’s tourism boom started five years ago; the SunshineSunshine, NSW Sunshine, VIC State has more tourism attractions than any other state, but there’s no tourism plan, there’s been limited investment in tourism-related projects, and there’s no marketing strategy,” he said.

“Asia’s middle class are waving out the window of the plane as they fly right past enroute to other states.

Generally speaking, for every one job at the coalface in central Queensland there are nine managerial and administration jobs in Brisbane’s CBD. The mining sector is starting to expand again now and that’s great for the broader economy and property markets all over the state.”Overseas visitor numbers for the year ending March 2018 again show Queensland’s growth of 6.2 per cent to be lagging well behind Tasmania (35.7 per cent), Canberra (24.8 per cent), South Australia (14.2 per cent), Victoria (8.5 per cent) and NSW (8.3 per cent).”

Natural resources, mines and energy

In financial year 2018–19, the Queensland government plans to spend $91 million on natural resources, mines and energy, will contribute towards:

$66 million to building the Rookwood Weir; and
$5 million to meet dam safety requirements at the Glen Niven Dam.

The Queensland government will also save $50 million to use for capital grants, which will contribute towards:

Up to $50 million to the development of concentrated solar thermal with storage projects.

CS Energy Limited is set to see $225.5 million, which will contribute towards:

$104.6 million to upgrade the Callide Power Station;
$99.1 million to improve the Kogan Creek Mine;
$4.8 million to improve the Wivenhoe Power Station;
$17 million to improve business systems at the Brisbane head office.

Stanwell Corporation Limited is set to see $208.6 million in funding, which will contribute towards:

$69.8 million to upgrade the Tarong Power Station;
$54 million to upgrade the Stanwell Power Station;
$31.9 million to upgrade Meandu Mine;
$23 million to upgrade Swanbank;
$21.2 million to upgrade information technology; and
$5 million to developing future gas supply to Swanbank Power station.

Energy Queensland is set to see $1.461 billion in funding, which will contribute towards:

$29 million to continue working on the SunCoast Power Project;
$15.9 million to upgrade the Mackay TennysonTennyson, QLD Tennyson, SA Street Substation;
$2.6 million to upgrade the Labrador Substation;
$2.6 million to upgrade the Clayfield Substation;
$1.5 million to upgrade the Palm BeachPalm Beach, NSW Palm Beach, QLD Substation;
$1.1 million to upgrade the CabooltureCaboolture, QLD Caboolture, QLD West Substation; and
$345,000 to upgrade the Amamoor Substation.

Powerlink Queensland is set to see $232.7 million in funding, which will contribute towards:

8.7 million to refit the Collinsville-Proserpine transmission line;
$7 million to replace assets at the Gin Gin Substation near Bundaberg;
$4.2 million to install a new transformer at Calvale;
$3.6 million to replace plant and systems at the Rocklea Substation in Brisbane;
$2.4 million to replace systems at the Calvale and Callide B Substations;
$2.6 million to replace systems at the Nebo Substation near Mackay.

SunWater Limited is set to see $25.6 million in funding, which will contribute towards:

$9.1 million to repair, maintain, renew and enhance existing water infrastructure and schemes across regional Queensland;
$1.2 million to improve Beardmore Dam;
$345,000 to complete and establish the Emergency Management Response Plans for flood detection;
$3.6 million for pursuing opportunities such as hydro-electic power, solar emergency and the raising of Burdekin Falls Dam;
$6.2 million to establish and fit out a new Brisbane office;
$640,000 to software and hardware development; and
$4.5 million to plant and equipment.

Gladstone Area Water Board is set to see $22.8 million in funding, which will contribute towards:

$3.6 million to the offline standby and storage repump station, provide 14 days of raw water supply independent of infrastructure at Awoonga Dam;
$829,000 to replacing flowmeters and purchasing new mobile emergency generators;
$547,000 to maintain the East End Reservoir; and
$750,000 to undertake a condition assessment of South Trees Pipe and to install cathodic protection on South Trees Bridge.

Mount Isa Water Board is set to see $9 million in funding, which will contribute towards:

$2 million for the Mount Isa Terminal Reservoir storage tanks project;
$1 million to start obtaining pipe material for renewing sections of the Moondarra to Mount Isa Terminal Reservoir; and
$1.7 million to start renewing high-voltage yards and electro-mechanical equipment in the Lake Julius power system.

Seqwater is set to see $147.2 million in funding, which will contribute towards:

$1 million to continue planning works for the Lake MacDonald safety upgrade;
$10 million to the Sideling Creek Dam safety upgrade;
$1.5 million to keep upgrading 20 filters at the Mount Crosby East Bank Water Transfer;
$1.7 million to refurbish the Somerset Hydro Electrical Plant;
$13 million to upgrade the Leslie Harrison Dam; and
$3 million to continue planning for the planned pipeline connection for Beaudesert to the water grid.

The planned expenditure on mining and natural resources is a good thing, as Mr Pressley said the sector plays a vital role for Queensland's economy.

“Generally speaking, for every one job at the coalface in central Queensland there are nine managerial and administration jobs in Brisbane’s CBD. The mining sector is starting to expand again now and that’s great for the broader economy and property markets all over the state,” Mr Pressley said.