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Covid dividend: How Qld pocketed $2 billion tax windfall from pandemic

Queensland’s ability to ward off the severe lockdowns and other Covid-19 restrictions has helped generate a $2 billion windfall in tax revenue for the state.

Apr 27, 2022, updated Apr 27, 2022
Queensland had a stand-out quarter for wage increases (File photo)

Queensland had a stand-out quarter for wage increases (File photo)

According to the Australian Bureau of Statistics Queensland’s tax revenue jumped 14.7 per cent to $16.1 billion in 2020-21 from $14.1 billion the previous year. Local government in Queensland made another $4.3 billion, a rise of 2 per cent.

The state’s performance beat NSW and Western Australia whose tax intake was up 10.8 per cent.

The tax per capita in Queensland, which included local government taxes, was $3950 during the year, an increase of 10.5 per cent, which was easily the biggest increase among the states, but still put Queensland well behind the totals in NSW, Victoria and Western Australia, as well as the national average.

Treasurer Cameron Dick said tax revenues were rising because more Queenslanders were working.

“More money is flowing through our economy, and more Queensland products and commodities are being sold around the world,” he said.

“The strength of our health response through the pandemic means we can now invest more in the hospitals, schools and roads that Queenslanders deserve, while maintaining the financial buffers for future events.”

While the growth in Queensland’s tax take was higher than the national average, according to Adept Economics’ Gene Tunny the national figure was dragged down by the severe lockdowns in Victoria which affected a range of tax revenues including payroll tax and stamp duty.

Tunny said Queensland out-performed NSW by a reasonable amount and Victoria by a lot in 2020-21, partly due to better Covid outcomes, meaning better tax numbers, particularly for payroll tax, stamp duty, and gambling taxes.

He said ABS data also showed that Queensland’s economy grew 2 per cent in 2020-21 compared with 1.4 per cent in NSW and -0.4 per cent in Victoria and 1.5 per cent nationwide.

“This is the largest driver of Queensland’s superior tax performance,” Tunny said.

“Queensland’s superior economic performance was partly related to attracting people from interstate. During the pandemic, Queensland has been growing at around 1 per cent annually compared with a .25 per cent nationally, with Victoria losing about half a percent of its population, many of them coming to Queensland.”

But the influx of interstate migrants also helped Queensland’s tax take.

Stamp duty raised almost $4 billion, a $900 million increase, which was likely to be because of the real estate boom. Land taxes also increased by more than $100 million.

Taxes on gambling in Queensland jumped by $300 million to $1.5 billion. Big increases occurred in racing and sports betting as well as poker machine taxes.

Gambling often increases during hard times and studies have found an increased level of gambling despite access being limited during the pandemic.

Stamp duty on vehicle registrations jumped by $130 million and other vehicle taxes raked in $2 billion

 

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