Victoria State Liberals look to ease tax burden

MODEST tax relief fuelled by a surging property market is set to be detailed in Tuesday’s Victorian budget.

State Liberals look to ease tax burden

MODEST tax relief fuelled by a surging property market is set to be detailed in Tuesday’s Victorian budget, which will deliver on long-promised infrastructure for the increasingly gridlocked state.

Victorian Treasurer Michael O’Brien has indicated there will be some tax relief but it will be limited by a multi-billion-dollar infrastructure spend to deal with the state’s growing pains.

Mr O’Brien said revenue from the property market had exceeded expectations but cautioned the hot run would not be sustainable across the medium term.

He said debt would remain tightly controlled to enable the state to retain its AAA credit rating.

The sale of the Port of Melbourne — worth an estimated $6 billion — is expected to be outlined in the budget.

Tony Abbott yesterday handed Victoria an extra $1.5bn to build the western end of the $18bn East West Link, which will see construction start next year, further assisting the government’s attempts to balance the budget.

Mr O’Brien said negotiations were also under way for concessional loans from the commonwealth to help build the western section of East West Link, which would provide another river crossing for motorists in Melbourne.

Mr O’Brien said the huge burden of infrastructure costs meant there was a limit to what tax relief could be offered.

“I’d like to do something in the budget on tax,’’ he told The Australian. “Where we can responsibly afford to cut taxes I’m going to cut taxes and whether that’s for business or households, if the ­financial capacity is there, we’d like to do it.

“The Victorian budget and the federal budget are in different ­positions.’’

Victoria is the sole state government to enjoy a AAA credit rating and the Coalition is expected to campaign heavily on financial responsibility up until the November 29 election.

This budget will be Mr O’Brien’s second, with the first delivered last year only weeks after he was elevated to the position after the reshuffle sparked by the removal of Ted Baillieu as premier.

“You will always be judged on your performance,” the Treasurer said.

“This budget will deliver very significant surpluses.

“But those surpluses are what funds the infrastructure. If you fritter away those surpluses you can’t deliver the infrastructure.

“We are not building a war chest for our election, we are not building a war chest for Labor to spend the surpluses.

“You cannot spend those surpluses without putting that infrastructure at risk.

“Now that’s a really important message for the community to understand.’’

Mr O’Brien said there were ongoing efficiencies being undertaken by the government but there were no plans for further significant job cuts as were unveiled in the Coalition’s second budget.

He said the government had been able to add 5 per cent more public servants to frontline tasks since the Coalition was elected in late 2010.