Queensland, Research & Analysis

IAQ: improved business sentiment in first half of 2018

IAQ: improved business sentiment in first half of 2018

“This is a timely Spotlight Survey with the federal, state and local government budget cycles now complete. The backdrop is that whilst Queensland doesn’t have sustained funding from an asset recycling program, all levels of government seem to be stepping up to get their big projects moving.” said CEO Steve Abson.

The survey found that Renewable Energy Generation has been a standout Queensland asset class in the past six months, with over 70% indicating stronger project activity in 2018 compared to 2017.

“Queensland now has the lion’s share of major renewable projects in the nation with over 30 solar, hydro and wind generation projects either under consideration or being built,” said Abson.

More than half of respondents (54%) also said that in the first half of 2018, sales revenue had increased or significantly increased compared with the last half of 2017. Additionally, close to 50% of organisations surveyed said they’d be taking on new employees in the next six months.

“Fully funded projects like Cross River Rail, Inland Rail and Brisbane Metro are now reaching the market, driving tender activity and helping attract Queensland professionals back to their home state,” Abson added.

Despite more positive sentiment for revenue and jobs growth, the survey found that governments aren’t meeting industry’s expectations for infrastructure planning and delivery, with three out of four citing investment prioritisation as a key issue.

“On the one hand, we’re seeing industry give governments a pat on the back for getting on with funding their projects. Yet on the other hand, it’s saying that if you just sat down together more often and prioritised around a common long-term plan, we could see much more bang for tax payer buck,” Abson said.

“Industry is encouraging more initiatives like City Deals, which are being used to align investments around a common set of objectives and are good examples of the kind of engagement governments need to have with both industry and communities.”

IAQ said the survey also sends the federal government a message that the National Partnership Agreement be reformed by the July 2019 expiry date so that projects like Beerburrum to Nambour Regional Rail can be co-funded with certainty.

“Like a M1 road package before it, there’s now a gap in funding of $230 million for this critical rail link to the Sunshine Coast. This is because the feds will fund half of this $780 million project, but the state wants it to stump up 80%. Obviously, Queensland companies asked to tender this major project can’t do so with complete confidence when 30% of the project is still unfunded,” Abson said.

He also pointed to emerging concerns over surprising new ‘enhancements’ recently announced to the Palaszczuk government’s Buy Queensland policy.

“Despite enhancements coming into immediate effect on projects valued over $100 million, industry is still unclear on how procurement processes will be affected. Consortia committing huge sums to bid multi-billion-dollar government projects deserve certainty on how their tenders will be ranked against ‘best practice’ safety and industrial relations criteria,” he said.

“We encourage the state government to genuinely engage with industry before introduction of any best practice principles to ensure they unlock the sector’s full potential.”

The July 2018 Spotlight survey was sponsored by the Port of Brisbane. The full survey can be found here.

Send this to a friend