Queensland Government response to COVID-19

This report is the first phase of our audit program examining the Queensland Government’s response to the COVID-19 pandemic. It aims to promote understanding of the various government response measures and their costs.

This first report does not assess the effectiveness or value for money of the government’s response measures. Its aim is to inform our future audit program and identify other areas of focus for additional assurance reports. We plan to publish a three-year annual work plan in early 2021, which will outline the assurance reports we plan to conduct.

We have not audited the information included in this report for completeness or quality—we provided central government agencies with the opportunity to review and confirm the accuracy of the information relating to them.

It is critical that government-led responses are supported by sound controls to manage any additional risks, and effective governance and leadership must continue. It is important that entities apply the insights from our audits across government to new and emerging programs being delivered in response to COVID-19. In my reports, there are learnings that are useful to all entities as we respond to COVID-19 impacts.

For example, in report number 14 for 2017–18, The National Disability Insurance Scheme, I emphasised the importance of strengthening program oversight and governance arrangements across government. In my report, I also highlighted the challenges and risks of not having a whole-of-government approach to program management and reporting arrangements.

While collating this report, we were unable to obtain information on some aspects of the response measures. Both Queensland Treasury and the Department of the Premier and Cabinet told us that, although they are involved in coordinating the response, they do not have complete information about what the uptake rates of the individual measures are.

We recognise that government agencies have had to work under extraordinary circumstances during the pandemic, rapidly designing response measures to unprecedented events. However, it is critical that the effectiveness of the government’s response is monitored and assessed to determine whether program outcomes have been achieved. This requires fit‑for‑purpose governance and reporting arrangements at a whole-of-government level.

Brendan Worrall
Auditor-General

The COVID-19 pandemic (COVID-19) is causing significant adverse impacts on individuals, businesses and the Queensland economy. The speed and depth of the impacts, and the ongoing government responses to them, are unprecedented.

The Queensland Government has announced a range of measures with the aim of supporting the state economy, promoting public safety, and assisting households and businesses. The costs of the government’s response are significant and will largely depend on the ongoing health and economic impacts of the pandemic.

This report covers the government’s response measures up to 21 August 2020. It covers key measures across four response areas—health care, support for individuals, support for businesses, and public safety. The report does not cover all of the government’s initiatives, such as its response through the COVID Safe Business Framework.

As at 21 August 2020, the Queensland Government had announced over $7 billion in response measures, representing two per cent of gross state product. (Gross state product is an aggregate measure of the total economic production of goods and services, including international and interstate trade). This is in addition to $314 billion of response measures announced by the Australian Government (National Cabinet Media Statement, 7 August 2020). We acknowledge that while our report covers the period 25 January 2020 to 21 August 2020, the Queensland Government announced further response measures on 7 September 2020 as part of its COVID-19 Fiscal and Economic Review. As a result, the measures now total more than $8 billion.

Given the substantial additional expenditure required to meet the government’s COVID-19 related commitments, the Queensland Government sought legislative approval for this funding. In April 2020, the Queensland Parliament passed the Appropriation (COVID-19) Act 2020, providing funding of $4.8 billion over two years—$3.18 billion in 2019–20 and $1.62 billion for 2020–21.

The balance of the government’s expenditure is expected to be funded through existing appropriations, but not all of the response measures involve actual payments from the government to the intended recipients. The Queensland Government’s response measures also include support in the form of tax relief and rent waivers.

Central agencies should consider the following questions as part of their governance role for the Queensland Government’s COVID-19 response:

• What are the objectives of each response measure and how will their effectiveness be measured?
• What are the uptake rates of the response measures and how does this compare with what was expected when the initiatives were announced?
• What are the actual costs of delivering the response measures?

Snapshot

This snapshot highlights the key facts relating to the Queensland Government’s response to COVID-19.

On 29 January 2020, under the Public Health Act 2005, the Minister for Health and Minister for Ambulance Services made an order declaring a public health emergency in relation to the COVID-19 pandemic (COVID-19).

From mid-February 2020, the Queensland Government began announcing a range of economic stimulus support measures in response to COVID-19. On 19 May 2020, the government announced Queensland’s Economic Recovery Strategy—Unite and Recover for Queensland Jobs (economic recovery strategy) to assist the state to recover from COVID-19.

Stage one of the economic recovery strategy built on the government’s initial response to the crisis, while stage two focuses on supporting traditional industries such as construction, agriculture, and resources. Further stages of the economic recovery strategy include providing Queenslanders with the skills they need to find meaningful jobs and set up pathways for the future. Figure 1A shows the key stages of the government’s response to COVID-19.

On 20 August 2020, the Queensland Government released Queensland’s Economic Recovery Plan (economic recovery plan). The aim of this plan is to drive the state's longer‑term economic response.

Since the start of COVID-19, several key events, including various government announcements, have affected individuals, businesses and the broader Queensland economy. Figure 1B shows a timeline of the key events in the Queensland Government’s response to COVID-19. A more detailed timeline of events is set out in Appendix C.

This chapter provides more information about the Queensland Government’s response to the COVID-19 pandemic (COVID-19) across the four key response areas—health care, support for individuals, support for businesses, and public safety. Figure 2A shows the cost of the government’s COVID-19 response.  

How is the Queensland Government supporting the health response to COVID-19?

The Queensland Government is providing $1.2 billion funding to increase the capacity of Queensland’s health system to confront COVID-19. This includes expanding the capacity of fever clinics, emergency departments, acute care services, and regional aeromedical services for our remote communities. Of the $1.2 billion, Queensland Treasury has transferred $0.48 billion (40 per cent) to Queensland Health, as of 30 June 2020.

Figure 2B shows the health system areas the government is targeting through this response measure.

The Queensland Government's other key measures supporting the health response to COVID‑19 include:

• $10 million funding to The University of Queensland to support the development of a COVID-19 vaccine
• $28 million in grants to community-based health service groups to ensure vital services can continue
• $21 million to combat the spread of COVID-19 amongst First Nations Queenslanders
• $46.5 million for local mental health community treatment and support services.

Estimated total cost of Queensland’s health response to COVID-19

In March 2020, the Queensland Government estimated the total cost for the COVID-19 health response to be $2.34 billion. This was based on an initial forecast that there would be a major peak in COVID-19 cases towards the end of April 2020. Of the total estimated cost, the Queensland Government allocated $1.2 billion in accordance with the new National Partnership on COVID-19 Response, signed by all Council of Australian Governments (COAG) leaders on 13 March 2020, where a 50-50 share of funding between the Commonwealth and the states and territories was agreed. Figure 2C shows Queensland Health’s anticipated expenditure, estimated as at March 2020.

How is the government supporting individuals?

The Queensland Government has introduced support measures for people facing specific economic or personal difficulties as a result of COVID-19. These measures are in addition to the Australian Government’s economic response and are expected to cost over $1.1 billion. Figure 2D provides an overview of the Queensland Government’s measures to support individuals.

Figure 2E sets out key activities that the Queensland Government is undertaking to support individuals and the associated costs, where we have been able to identify them.

How is the government supporting businesses?

The Queensland Government has announced a number of support measures for businesses with the aim of helping them cope with the economic disruption caused by COVID-19.

These support measures are expected to cost over $4.6 billion. The full cost of some of the government’s measures will not be known for some time, as it will depend on factors such as take-up rates and how many businesses default on their loans. Figure 2F provides an overview of the government’s measures for supporting businesses.

Figure 2G sets out key activities that the Queensland Government is undertaking to support businesses and the associated costs where we have been able to identify them.

Queensland’s Economic Recovery Strategy—Unite and Recover for Queensland Jobs

Queensland’s Economic Recovery Strategy—Unite and Recover for Queensland Jobs (economic recovery strategy) includes further initiatives, which build on the government’s initial response to the crisis. The economic recovery strategy outlines the government’s guiding principles for how it plans to get Queenslanders back to work, with a focus on three key priorities:

• building vital infrastructure
• strengthening Queensland’s industries
• enabling future growth.

The economic recovery strategy includes a range of measures, investments and projects. Some of the initiatives are new support measures, while some are government commitments to maintain existing investments. For example, stage one of the economic recovery strategy includes a government commitment to maintain the current state infrastructure investment program at $51.8 billion over the next four years.

The Queensland Government released Queensland’s Economic Recovery Plan in late August 2020. The aim of this plan is to drive the state's longer-term economic response. We have not audited the process of how effectively the government has planned and developed the economic recovery strategy, economic recovery plan and the included initiatives.  

Figure 2H shows the number of initiatives per sector that form part of the government’s economic recovery strategy (stages one and two).

Figure 2I lists the initiatives forming part of the Queensland Government’s economic recovery strategy.

What is the cost of the government’s public safety measures?

In its response to COVID-19, the Queensland Government has established several processes to promote the health, safety and welfare of Queenslanders. These include implementing border restrictions and quarantine requirements. Since March 2020, the Queensland Chief Health Officer has issued a number of public health directions to assist in containing, or responding to, the spread of COVID-19 within the community.

Figure 2J sets out key activities that government is undertaking to promote public safety and the associated costs where we have been able to identify them.

How is the government funding its response measures?

The Queensland Government sought legislative approval to fund the additional expenditure required to meet its COVID-19 related commitments. On 23 April 2020, the Queensland Parliament passed the Appropriation (COVID-19) Act 2020, providing additional funding of $4.8 billion over two years—$3.18 billion in 2019–20 and $1.62 billion for 2020–21.

This includes $2.115 billion to be transferred by Queensland Treasury to other agencies in 2019–20. Queensland Treasury transferred $1.99 billion to various departments responsible for delivering the response measures in 2019–20.

It is important to note that not all of the response measures require actual payments from government to individuals and businesses. Government’s response measures also include support in the form of tax relief and rent waivers.

What are the uptake rates of the government’s response measures?

We were unable to obtain information on the uptake rates of most of the government’s response measures from central government agencies. From our discussions with Queensland Treasury and the Department of the Premier and Cabinet, the information on uptake rates are with the individual delivery agencies and are not reported to central agencies.

Based on the briefings provided by Queensland Treasury to the parliamentary inquiry into the government's economic response to COVID-19, we are aware of the following uptake rates of some of the response measures:

• Payroll tax relief—14,501 businesses approved for payroll tax refund or holiday equating to $502.7 million (as of 12 June 2020). A total of 9,896 businesses approved for payroll tax deferrals from February to June 2020 (as of 12 June 2020).
• Land tax relief and payment deferrals—5,253 landowners approved for land tax relief at a value of $57.8 million (as of 12 June 2020).  
• Electricity relief for small businesses—125,205 rebates issued to small businesses at a value of $62.6 million (as of 11 June 2020). 
• Household utilities bill relief—over 1.4 million households issued with rebates, at a value of over $286.2 million (as of 11 June 2020).

For the Jobs Support Loans initiative, according to its lead agency’s website (Queensland Rural and Industry Development Authority), 6,929 loans were approved at a value of $995.9 million (as of 7 August 2020).