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Bush bonus may be too costly: councils

The State Government is offering first home buyers a financial  incentive to live in regional areas.

BT

The State Government is offering first home buyers a financial incentive to live in regional areas.

Queensland councils are worried the state government won't be able to fund new initiatives designed to encourage more people to live outside the southeast region.

Premier Anna Bligh today released the government's response to a growth summit held in March.

From July 1, first-home seekers who buy or build a new house outside the southeast corner will be eligible for an $11,000 grant.

It will apply to areas outside Brisbane, Gold Coast, Redland, Logan, Ipswich, Lockyer Valley, Scenic Rim, Somerset, Moreton Bay and Sunshine Coast council areas.

The government has also promised to move more state public servants out of the southeast to create jobs in regional towns and cities.

But Local Government Association of Queensland (LGAQ) executive director Greg Hallam said more jobs, public transport, hospitals, schools and social facilities were needed before people considered moving to the regions.

Mr Hallam said the state's most recent financial forecast showed capital spending in Queensland will drop from $20 billion a year to $9 billion a year in 2012.

"The difficulty we face is that growth will go on unabated and capital spending will more than halve in two years time," he said.

"How does the government deliver on this program when it's cutting back so significantly?

"We think the thinking is good, the planning is good, the initiatives are good but they've got to be funded."

LNP leader John-Paul Langbroek said providing jobs and better services would do more to attract and keep people in the regions than the first-home owners boost.

Property analyst Michael Matusik said the move would artificially inflate prices in regional areas and translate into very few sales and new construction.

He said a better move would be to improve the economies of regional locations by removing the imposts on new development, such as cutting infrastructure costs and faster approval times.

Ms Bligh said the government would monitor house prices over the next two years to ensure the grant was working.

Other initiatives announced to address population growth include developing Townsville as north Queensland's key centre.

"Townsville has the capacity to be, effectively, a second capital," Ms Bligh said.

"It already has a large population base, it has a very large defence force population, it has a very strong port, it has an industrial base.

"We think we need to start planning for it to be an even bigger city in the future."

Ms Bligh said government departments and functions like call centres were being looked at to see which could be moved from the southeast.

But she said this was a long-term goal which would take between two to five years.

She said a promise 18 months ago to move government workers to Ipswich had not yet occurred, as planning and consultation with staff was still happening.

The new initiatives come after the announcement of three new satellite communities at Ripley Valley, Yarrabilba and Flagstone to house 250,000 people in the south and western growth corridors of the southeast corner.