Budget back in the black

By BECHER TOWNSHEND

BUSINESS has given the state government’s third budget the thumbs up on the back of some $1.8 billion in infrastructure spending, coupled with an undertaking to deliver a $77 million surplus in 2016-17.

Tasmanian Chamber of Commerce and Industry chief executive officer Michael Bailey said the budget was terrific for Tasmania as it gave business a lot of support and confidence that would lead to job creation around the state.

“The flow-on effect of the infrastructure spending will benefit the broader community with long-term gains through improved education standards and a better prepared workforce,” Mr Bailey said.

“The surplus is important because it highlights the government’s responsibility to live within its means. We all would have liked to see additional spending in some areas but fiscal responsibility is paramount.”

The centrepiece of the budget is a promise of a surplus by the end of the 2016-17 financial year, despite significant headwinds, compliments of the energy crisis ($100 million), summer bushfires ($31 million) and a loss of nearly $500 million in GST revenue over the next four years.

The predicted surplus has fallen from $100 million last year, down to $77.3 million reflecting the challenges the government has faced and sees promises to reduce the car registration costs delayed for a further year.

While the government is keen to talk up the economy, the budget papers indicate there are still challenging times ahead, with growth of the Tasmanian economy expected to shrink from 2.5 per cent this year to 2.25 per cent in 2016-17.

In addition, the unemployment rate is predicted to remain steady at 6.75 per cent over the next three years, so while business confidence may be at new highs, the national and global economic slowdown is likely to take its toll.

This may well explain the government’s decision to reintroduce the first home builders grant to $20,000, which is backdated to January 1, 2016 and considered by Treasury to have a meaningful impact on the Tasmanian economy.

In addition some $1.8 billion in infrastructure spending including some $656 million on road and bridge improvements such as the Midland Highway, Brooker Highway and Esk Main Road as well as $457 million for the Royal Hobart Hospital redevelopment are welcome.

Other bright lights include $18 million to Metro for 100 new buses, while the papers confirm a fighting fund of $80 million to replace the ageing Spirit of Tasmania vessels.

As a result of the energy crisis a $10 million energy efficiency fund for small businesses and residential users has been created offering low-interest loans for meaningful energy reduction initiatives.

In terms of funding for education and health, the government is continuing on with its existing commitments.

Overall, there will be an extra $50 million each year for health, while education will see some $113 million rolled out over four years for continued upgrades of our schools infrastructure.

The Affordable Housing Action Plan will see an extra $60 million over three years to see extra accommodation for those in need, while police will get an extra $5 million to accommodate the force in rural and regional areas.

The Better Cities plan, which works to the moving of the university to Burnie’s West Park and Launceston’s Inveresk as well as Devonport’s Living City sees an extra $30 million, making the likelihood of a federal government announcement in Launceston just about a forgone conclusion.

These infrastructure initiatives combined add to the $425 million industry support and jobs package announced last year, which are designed to continue to stimulate the economy, particularly in the North and North- West.

Other initiatives include more than $2 million for tourism including aviation market development, the Tasmanian brand as well as Events Tasmania.

Funding for the creation of a single statewide planning scheme continues at $400,000 with some $1.9 million for Iplan, a system to make planning applications easier.

Elsewhere there are funds to deal with the forest residues in the South of the state, $1.4 million for geo services in the mining industry and $2 million for biosecurity.

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s