Revenue management

Customers are the focus

To drive economic and jobs growth, and help fund services for Queenslanders, Treasury administers a revenue base of around $16.9 billion by delivering and administering simple, efficient and equitable revenue management services for state taxes and royalty revenue. Additional responsibilities include revenue compliance, grant schemes, and debt recovery and enforcement activities for the state.

Treasury, through the Office of State Revenue (OSR), fulfils its revenue responsibilities by:

  • adopting leading e-business practices with high-level client support, and firm and fair enforcement
  • providing legislation and revenue policy advice to government
  • progressing online tools and services to support innovative business practices
  • developing and implementing targeted, fair and efficient debt enforcement strategies
  • leading end-to-end penalty debt management improvements through collaborative stakeholder engagement  using business intelligence and behavioural insights to inform debt recovery.

Key issues in our environment

Queensland’s economic growth in 2019–20 is forecast to be 3 per cent. This growth is underpinned by increased GST revenue from the Australian Government, as well as royalties. However, royalty revenue from coal is forecast to decline gradually over the two years to 2021–22. Revenue from taxation is expected to increase at an average rate of 5.8 per cent over the four years to 2022–23:

  • A slight reduction in transfer duty revenue is expected in 2019–20, driven by a decline in the volume of residential property transactions over the first half of 2018–19. This revenue is forecast to then increase over the three years to 2022–23.
  • New land tax measures in the 2019–20 Queensland Budget are expected to increase land tax revenue during the year, and include:
  • higher land tax rates for companies and trustees with aggregated landholdings over $5 million
  • an increase in the surcharge rate for absentee landowners  a new surcharge for foreign companies and trustees from 1 July 2019.
  • Payroll tax revenue is expected to grow in 2019–20 driven by wage and employment growth, along with the increased payroll tax rate for employers with annual taxable wages above $6.5 million (from 1 July 2019). This is forecast to more than offset reduced revenue from budget initiatives of:
  • an increased payroll tax exemption threshold to $1.3 million in annual taxable wages. This will mean 1,500 Queensland businesses will no longer have to pay this tax.
  • a discounted payroll tax rate for regional employers
  • a rebate for employers that demonstrate a net increase in full-time employees
  • an extension of the apprentices and trainees rebate.

Royalty revenue is expected to grow in 2019–20 largely driven by increased petroleum royalty rates from 2019–20 onwards along with the increased royalty revenue from base and precious metals, which is expected to more than offset a decline in royalty revenue from coal. Total royalty revenue is expected to decrease in 2020–21 in line with coal prices gradually declining to medium-term levels by early 2021.

 

Total revenue administered by Office of State Revenue 2014 –15 to 2018–19

Total revenue administered by Office of State Revenue 2014–15 to 2018–19

Office of State Revenue administered revenue 2018–19

Office of State Revenue administered revenue 2018–19

Objective

Ensure our services are tailored, fit-for-purpose and easy to access

During 2018–19, Treasury continued transforming its revenue management service, to deliver services and outcomes for taxpayers, staff, government and Queenslanders that are client centric, digitally enabled and data driven. This included:

  • extending OSR’s intelligent virtual assistant Sam to all remaining revenue lines. From February 2018 to 30 June 2019, Sam has logged more than 17,300 taxpayer interactions, with over 80 per cent of enquiries being resolved at first contact.
  • delivering a new online portal for land tax, OSR Online, which allows land taxpayers to receive and pay assessments, claim exemptions, and have full transparency over their taxable landholdings. In the coming year, OSR Online will be extended across all revenue lines.
  • delivering a new business intelligence product to support all aspects of OSR’s reporting. The product uses machine learning to deliver smart insights that identify and predict trends, and will allow OSR to quickly discover data patterns that will help drive improved business intelligence outcomes.
  • implementation of an enterprise data warehouse to enable OSR to realise the full value of its data in all analytics and intelligence related activities
  • using software solutions to deliver insights into taxpayer behaviours and drivers, enabling OSR to transform interactions with clients, leading to improved outcomes.

Objective

Partner proactively to facilitate better outcomes for the community

Treasury’s approach to achieving better outcomes for the community in the field of penalty debt involves:

  • direct engagement and services that help people resolve their debt
  • firm measures for high-value debtors  options for people in hardship.

Transforming penalty debt management in this way has yielded positive results in 2018–19:

  • Growth in the debt pool fell from almost 15 per cent in 2015–16 to under 3 per cent in 2018–19. This is a strong result when compared to annual average growth rates of approximately 11 per cent over the past 15 years.
  • Debt finalisation has reached 97 per cent, well above the target of 85 per cent.
  • The State Penalties Enforcement Registry (SPER) achieved near-record collections of $291 million in 2018–19. This is despite suspensions for Queenslanders impacted by natural disasters during that time.

The data enrichment program that began in February 2018 has resulted in the collection of $33.15 million in debt.

Direct engagement to resolve penalty debt

SPER continued its outbound contact campaign initiatives in 2018–19, calling customers who had not paid their debt. Since its implementation in June 2016, around 62,000 customers have been called, resulting in the collection of $32.4 million in debt.

SPER officers joined police on roadside operations such as random breath testing, drug testing and automatic number plate recognition to engage with people who have avoided their debts. Similar activities were undertaken with Queensland Rail, TransLink and police railway officers. These collaborative partnerships and initiatives increase SPER’s visibility in the community and improve public perceptions of SPER.

During the year, SPER continued to lead the Penalty Debt Management Council, a collaboration of agencies to improve end-to-end penalty debt management across government. Through the council, SPER and the Department of Transport and Main Roads have agreed to prohibit vehicle registration transfer for vehicles under SPER enforcement action.

In the year ahead, SPER’s focus will be on improving information sharing with penalty debt agencies.

Enforcement for high-value debtors

In the three years to 2018–19, Treasury has collected more than $12.7 million in penalty debt through vehicle immobilisation (wheel clamping), seizure and sale (VISS). VISS is targeted towards people with higher value debt who can-but-won’t pay.

This is an important enforcement measure, as it meets community expectations that penalty debt is resolved.

Options for people in hardship

While Queenslanders expect that most people will do the right thing and resolve their SPER debt quickly, some people are unable to pay due to genuine financial or other hardship.

Work and development orders (WDOs) allow people in hardship to resolve their debt through unpaid community work with government and community-based organisations, supervised by Queensland Corrective Services.

The WDO program is continuing to see positive results in enabling people in hardship to resolve their SPER debt.

Since WDOs began in December 2017, around 8,200 WDOs have been created, and around 2,800 have been completed. In the 19 months of the program to 30 June 2019, a total of $7.6 million worth of debt has been resolved.

Objective

Enable sustainable growth that supports current and future government objectives

Each year, Treasury implements revenue initiatives designed to deliver a secure, sustainable revenue base to support the government’s priorities for Queensland. These initiatives are increasingly supported by replacing repetitive, rule-based transactions with automated machine- based responses, and by improved data quality and analytics.

In 2018–19, OSR introduced several automation projects, which have saved more than 160 weeks of manual processing activity. One of these was the introduction of an enhanced debt management solution for all revenue lines. This will enable:

  • access to more client information in one location to better serve clients, for example, with itemised statements of their complete debt
  • greater system flexibility for more targeted recovery actions that address high risk and high value matters more efficiently and effectively
  • earlier interventions and tailored communications and a less rigid collection process.

Foreign landowners

From 2019–20, the land tax surcharge on absentee landowners increases from 1.5 per cent to 2 per cent and a 2 per cent surcharge will apply to foreign companies and trustees of foreign trusts.

These measures are forecast to result in an increase in revenue of $131 million.

From 2019–20 the definition of absentee will also change so that Australian citizens and permanent residents living outside of Australia will no longer be considered absentees and will be exempt from the absentee surcharge.

Apprentice and trainee rebate

The Queensland Budget 2019–20 included an extension of the 50 per cent apprentice and trainee rebate for two more years.

First Home Owners’ Grant

The First Home Owners’ Grant helps Queenslanders buy their first home and helps stimulate the state’s construction and related sectors. The grant applies to newly constructed houses, townhouses or units valued at less than $750,000. During 2018–19, Treasury received 6,827 applications worth $119 million.

Land tax – home exemption

In Queensland, landowners are entitled to apply for an exemption from land tax for the land they use as their home. In 2018–19, Treasury automated its processing of these exemptions and at least 50 per cent of home exemptions are now approved automatically. This means fewer follow-up inquiries by clients, and Treasury can redirect time saved to other service delivery activities.

Last updated: 1 October 2019