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    Media Statements

    Coat of ArmsMedia Release
    Treasurer and Minister for Employment and Economic Development
    The Honourable Andrew Fraser

    Counting the cost of floods: revenue write downs

    Treasurer and Minister for Employment and Economic Development
    The Honourable Andrew Fraser

    Friday, January 28, 2011

    Counting the cost of floods: revenue write downs

    Treasurer Andrew Fraser today said the State’s Budget would be hit by massive revenue write downs to key revenue sources as the State faced a multi-billion dollar, multi-year rebuilding task.

    Mr Fraser said write-downs in key revenues such as royalties and transfer duty would add to the $1 billion write down from the GST contained in last year’s Commonwealth Budget update.

    “The total taxation and royalty revenue write down across the forward estimates is projected to be more than $1.5 billion since the Budget,” Mr Fraser said.

    “That’s put us more than $2.5 billion further behind the eight-ball, when you add on the $1 billion in reduced GST.”

    Over four years the key revenue lost comprises:

    ·Royalties: $159 million

    ·Transfer Duty: $1.4 billion

    ·GST: $1 billion

    Mr Fraser said royalty income would be hit hardest this year.

    “Royalties will take a bath – lost production and a rampant Aussie dollar have delivered a $286 million write down this year, before we make up ground from strong demand in the future.

    The floods are expected to put further strain on a housing market already under pressure from tight credit conditions with transfer duty now forecast to be lower than last financial year.

    “Our challenge is compounded by a large write down ($344 million) in transfer duty this year from a soft property market that will now take longer to recover.

    Mr Fraser also announced planned changes to transfer duty and royalty collection arrangements, aimed at ensuring the State’s revenue base is protected into the future.

    From 1 July 2011 royalties will now be collected through the Office of State Revenue with a move towards collection on a monthly basis proposed, Mr Fraser said.

    Mr Fraser said discussions had begun with the resources industry to implement the change, aimed at streamlining the collections system which currently operates on a quarterly basis.

    Further efforts to harmonise the state’s stamp duty regime will ensure simplified rules and reduce the scope for tax avoidance, said Mr Fraser.

    “Queensland will abolish the existing land-rich duty regime which sees different tax rates applying depending on the proportion of land value in a corporate transaction.

    “The existing 60% threshold is complex and provides incentive for companies to arrange transactions to avoid triggering tax obligations.

    “We will move to adopt the system employed in other states to promote harmonisation and close off the potential for tax avoidance.

    Mr Fraser said the changes would likely see in an estimated $30 million in revenue from transactions currently structured to avoid liability being collected by the Office of State Revenue from 2011-12.

    “This is not a revenue raising measure– this is about ensuring our system is robust and taxpayers can’t avoid their obligations.

    “Harmonising the system will reduce red tape and reduce avoidance.”

    The MYFER is available online at treasury.qld.gov.au

    Media contact: Treasurer's office - 3224 5982 or 3224 6361