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Premier has opinions while we have facts

Opinion Piece

Date : 02 March 2021

Author: The Hon Josh Frydenberg MP

Publication: The Courier Mail

Premier Annastacia Palaszczuk is entitled to her own opinions but not her own facts. The facts are the Morrison government has delivered to Queenslanders more than three times the amount of economic support than the State Government has committed to.

In less than 12 months, the federal government has provided more than $28.5bn in economic support to Queensland households and businesses. In contrast, the Premier has only committed to spend $8.8bn across the next four and a half years.

The Queensland government have provided the lowest level of economic support of any state or territory government at 2 per cent of gross state product. This is a third of the average of the total amount announced by all states and territories.

While the Morrison government has committed $251bn, or 13 per cent of GDP, NSW has committed $46.7bn or 7 per cent of GSP and Victoria has committed $44bn or 9 per cent of GSP.

Unfortunately for Queenslanders, when it comes to the level of state government support, this is one State of Origin contest their government doesn’t win.

The Morrison government’s support has seen $15bn in JobKeeper payments, $6.9bn in cashflow boost payments to businesses and $4.3 billion in coronavirus supplement payments flow to Queensland businesses and households.

Now with the economy recovering, around 470,000 individuals and 110,000 businesses in Queensland have graduated by the end of the December Quarter. This represents a 64 per cent fall in the number of workers relying on the program.

These improvements were seen right across the state with 75 per cent of people graduating off JobKeeper in Wide Bay, 72 per cent in Townsville, 71 per cent in Mackay, Isaac and Whitsunday regions and 66 per cent on the Sunshine Coast.

And as support through the Job-Keeper program tapered, the Queensland economy added more than 40,000 jobs between September and January. In fact, 224,000 jobs have been created in Queensland since the height of the economic crisis in May – with employment levels now sitting higher than they were pre-pandemic.

More broadly, the economic recovery is well under way. Private residential construction in Queensland increased 9.6 per cent in the December quarter and new loans for owner occupiers in Queensland have increased by 50 per cent over the year, supported by the Morrison government’s Home-Builder program.

The Morrison government knows that the transition will be tough for some businesses and workers. But with improvements across the economy, it is a transition that can be managed and one that must be managed.

The economy-wide JobKeeper program was always designed to be temporary and must come to an end.

At an estimated cost of $90bn, Job-Keeper is already the largest spending program in our history and we must remember that every dollar spent is a dollar borrowed.

Treasury has made clear in their review of the JobKeeper program that the program has a number of key features that create perverse incentives that become particularly pronounced when the economy strengthens.

In the words of Treasury, JobKeeper as the economy recovers “dampens incentives to work, it hampers labour mobility and the reallocation of workers to more productive roles, and it keeps businesses afloat that would not be viable without ongoing support”.

It is why the next stage of the recovery needs to target those who require support, whilst not getting in the way of the broader economic recovery. Any further targeted support needs to be proportionate, temporary and accompanied by a clear exit strategy.

These are the types of measures the Morrison government is considering. It is also important to remember that there is still around $100bn of the $251bn of committed Morrison government support still to be delivered to households and businesses to support them in the recovery. And while some of the $150bn in support already delivered has been spent, much of it has bolstered household and business balance sheets.

Deposits today are more than $240bn higher across the nation compared to this time last year. These savings, together with record low interest rates, means businesses and households are well placed to invest and consume as the recovery takes hold.

And although a number of programs are winding down, fiscal support will continue in the form of the Job-Maker Hiring Credit, the JobTrainer Fund, the bringing forward of personal income tax cuts, tax incentives for business investment and substantial infrastructure spending, including the Bruce Highway.

In fact, Treasury modelling shows that a projected 2.3 million taxpayers in Queensland will receive a personal income tax cut this year and 690,000 Queensland businesses will be eligible for business tax incentives, including temporary full expensing. We stand ready to continue to support Queenslanders through this crisis, as we have done from the very start of this crisis.

No amount of grandstanding and petty politicking by the Queensland Premier will detract from the indisputable fact that when it comes to the economic response in Queensland, the Morrison government has done the vast bulk of the heavy lifting.

Josh Frydenberg is the Federal Treasurer

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