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The bucks stop here - the businesses winning biggest from election cash splash

Business

The Queensland business sector is being showered with cash in this election but crucial details are lacking about how the hundreds of millions of dollars will be spent and why.

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The most obvious example is Virgin. For the second time, taxpayers have handed over millions to the company to keep it in Queensland. There have been no details on the benchmarks or what taxpayers will receive for the dollars, apart from keeping its downsized headquarters in Queensland and an expected 7 per cent return on investment.

“Is this adequate given the risks involved with a failed airline during a pandemic of unknown duration?” asks Dr Annette Quayle from QUT’s Business School.

Economists believe that support should not go to individual companies but be given as broader industry assistance, otherwise there are risks of the Government picking winners or continually shelling out millions to companies as the Federal Government did to car manufacturers.

“It could be a slippery slope,” one business leader told InQueensland.

But it is much more than just Virgin and the lack of transparency in the deals is far wider than what has occurred since the start of the campaign.

The pandemic brought a need for a quick economic response and the Government deferred its Budget until after the election and instead announced its spending through a fiscal economic update before the campaign.

Details of $4 billion in spending are scant. And not just for the media and commentators. Other MPs were left in the dark. Katter’s Australian Party’s Nick Dametto told Parliament: “I am glad to hear from the opposition side of the House that they are kept in the dark just as much as we are. From reading this, no-one really knows what is going on.”

In a paper written by Quayle and Associate Professor Jodie Moll, also from QUT’s Business School, it was stated that MPs were given just three hours to debate the emergency spending.

“Queensland is the least transparent of the three states (Queensland, NSW and Victoria), in terms of the information provided on the effects of COVID-19 on state finances,” the paper states.

As part of the election campaign, the Government has also promised funds to multinational mining company Glencore for its Townsville operations, $16 million for the CopperString project, as well as $40 million to Wagners for an entertainment facility and automotive centre at its Wellcamp site near Toowoomba.

Boeing will also get an unspecified investment from the Government for its drone facility. Adani will receive unspecified royalty relief as the first mover in the Galilee Basin in a deal that was flagged well before the election but only signed off two weeks ago.

The LNP is also promising an unspecified amount to Rheinmetall for a business park in Brisbane, a 10-year royalty freeze on mining and a $300 cashback for car registrations which has broad application for business. It has also promised cheaper electricity for manufacturing.

In relation to the CopperString deal Quayle said there was a “high need for transparency in relation to the form and amount of Government support being provided”.

“This transparency is currently lacking.  At the beginning of the election campaign, the Government announced that it is underwriting the initial costs including the EIS – the amounts are not specified,” she said

“Given the state is underwriting the risk in the private project we should find out how much we will be up for.”

For the Chamber of Commerce and Industry Queensland the promises are good but its general manager of advocacy and policy Amanda Rohan said there is a lot missing and the big questions were: what does it mean? Where is the vision?

“We really need some vision, we need to see where they are going to take Queensland,” she said

“There is not a cohesive strategy. The LNP had the Bradfield scheme and that’s visionary, and I get there are infrastructure pieces around that, but how does it all fit together?

“There has to be a bit more meat.

“But I do only think this is the beginning. There is more that needs to be done the provides a bit more opportunity for business on the ground.”

“I would expect to see out of the majors the mid to longer-term issues. The regulation reform, the non sexy stuff that will really help business.”

She said a small business in Bundaberg or Toowoomba would be asking why were the parties handing out cash to the likes of Glencore and Wagners and what was in it for small business?

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