Budget 2019: A whole world of promises from Treasurer’s sweet smell of excess

UPDATED: Tasmanian Treasurer Peter Gutwein has played down fears the state’s forecast Budget surplus will take hit from a loss in expected GST revenues. READ THE EDITORIAL

UPDATED: TASMANIAN Treasurer Peter Gutwein has played down fears the state’s forecast Budget surplus will take hit from a loss in expected GST revenues.

Last night’s Federal Budget revealed the national GST pool had not grown at the anticipated rate.

Mr Gutwein said this morning the affect on Tasmania’s bottom line would be $40 million in the current financial year, rising to $80 million in the 2019-20 financial year.

In the latest State Government revised estimates – which predict a surplus of $7.3 million in the current fiscal year – $20 million of that $40 million had been accounted for.

The Government said this year’s Budget would remain in surplus despite having to make adjustments to account for a further $20 million in lost GST revenues.

“The Budget is in good shape, we have a strong financial position and we’ll be able to manage it,” Mr Gutwein said.

“We’re going through the process at this very late stage in the current financial year putting together the Budget for the next financial year and obviously we’ll take these matters into account.”

Mr Gutwein said the lost GST revenue was an example of why the Government had been firm in its response to the public sector wages negotiation, as hundreds of teachers walked out of school today to protest for better pay and conditions.

“We’re providing a responsible but affordable wages offer,” he said.

“Revenue streams can rise and fall and it’s important that not only can we afford this today, but that we can afford to pay wages into the future.”

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EARLIER: THE State Government has welcomed the “key investments” in Tasmania from their federal counterparts in this year’s Budget.

Premier Will Hodgman said the spending announcements would grow the state’s economy and help build the infrastructure Tasmania needed for the future.

The Premier also welcomed the personal income tax cuts which would have a positive impact on 200,000 Tasmanians and help put downward pressure on the cost of living.

“With our state’s focus on trade and opening new markets for Tasmanian business, we also welcome the package of export grants which will assist our producers,” Mr Hodgman said.

“As well as the $68 million investment in the third tranche of the Tasmanian Freight Rail Revitalisation Program which helps get our world class produce to market.”

Mr Hodgman said the Budget confirmed the $25 million under the Hobart City Deal to combat congestion.

“Renewable energy is one of our most exciting opportunities and the Federal Budget locks in the commitment of $56 million to progress the Marinus second interconnector,” he said.

Premier Will Hodgman and Prime Minister Scott Morrison at the signing of the Hobart City Deal in February. Picture: LUKE BOWDEN

Master Builders Tasmania executive director Matthew Pollock said the Budget’s boost to skills funding and tax cuts for small businesses couldn’t come at a better time for the construction industry in Tasmania.

He said the commitment to support 80,000 new apprentice placements and a $2000 incentive payment for businesses would help boost apprentice numbers and ease the state’s skills shortage.

“Skills shortages and capacity constraints are a growing challenge,” Mr Pollock said.

“The Budget will help the industry expand to meet the growing needs of the community, including building more houses to take pressure off housing affordability.”

EARLIER: Treasurer Josh Frydenberg has fired the starting gun for the federal election campaign with a tax-cutting, road-building, debt-busting surplus Budget.

At his first attempt, Mr Frydenberg has outlined aspirations for not just one but four budget surpluses in a row — each one a feat of fiscal finesse that has eluded his predecessors for the past dozen years.

“Tonight, I announce that the Budget is back in the black and Australia is back on track,” the Treasurer told Parliament.

“For the first time in 12 years, our nation is again paying its own way.”

The nation’s first half-trillion dollar Budget promised $158 billion in personal and business tax cuts over the next decade, on top of $144 billion from last year.

There were no surprises for Tasmania with most of the spending announcements revealed in recent days — although some of the finer details remain hazy, likely to be revealed in the campaign to come.

Federal Treasurer Josh Frydenberg uses the Bridgewater Bridge to slingshot money to Lyons, Bass and Braddon. Image: CHRIS DOWNES

Mr Frydenberg projected a total of $45 billion worth of surpluses over the forward estimates, from $7.1 billion in 2019-20 up to $17.8 billion in 2021-22.

That continued fiscal responsibility would completely pay back the current $373 billion in government debt entirely by 2029-30 — although most of that work will take place by the government after next.

Government revenue is predicted to rise 3.6 per cent to $513 billion and expenditure 4 per cent to $500.9 billion in 2019-20.

The Treasurer stressed the Government’s record over the past six years of increasing growth, cutting unemployment, and boosting health and education spending.

“This Budget builds on our plan for a stronger economy,” he said.

“A stronger economy that benefits you — your family, your business, your community, your country.”

Federal Treasurer Josh Frydenberg delivers the Budget. Picture: AAP/Lukas Coch

The Government continues to paint an optimistic picture of the national economy, projecting growth of 2.75 per cent next financial year and unemployment holding steady at 5 per cent — in defiance of a slowing global economy.

Wages are expected to rise at a slightly faster rate: from a 2.5 per cent increase a year to 2.75 per cent a year.

But the Budget makes promises the Government may not be around to deliver and key assumptions likely to be severely challenged by Labor’s alternative budget vision to be delivered tomorrow.

Labor has promised to deliver its own — different — Budget within months, should it win office at the election likely to be held on May 11 or 18.

The Government’s prospects in that election are not the only uncertainties Mr Frydenberg faces, not the least of them the need to have the Budget passed in its entirety by both houses of Parliament in their last two sitting days.

Pre-budget announcements had taken most of the novelty out of last night’s Budget for Tasmania.

Hobart will benefit from the City Deal, already announced in detail by Prime Minister Scott Morrison and Premier Will Hodgman.

Infrastructure spending — primarily on roads — was the centrepiece for the state.

The Government will allocate $210 million to specific projects under the Roads of Strategic Importance initiative.

That includes $130 million for the Hobart to Sorell road corridor.

There is also $35 million for projects under the Urban Congestion Fund: $25 million for a Hobart Congestion Package and $10 million for Tasman Highway Intelligent Transport Solutions.

The Government said that in total the Budget allocated $313 million in new infrastructure spending for Tasmania.

There was also $68 million for the next stage of the Tasmanian Freight Rail Revitalisation Program, plus $56 million for the Project Marinus planning of the second Bass Strait interconnector to deliver the Battery of the Nation initiative.

And the Government will help support the Huon Valley’s recovery from summer’s devastating bushfires with $1.5 million towards Mona’s $2 million “major light show”.

The Budget also allocated $4.4 million to fund a second linear accelerator at the North West Cancer Centre in Burnie.

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