Tassie finances in good shape - but no relief for property buyers

Posted on 1/07/2008  

The Tasmanian Government's 2008 Budget provided $4 billion to fund education, health and infrastructure, bringing the Apple Isle into line with other states which have provided considerable sums for infrastructure.

The $4 billion spend included $1.5 billion on infrastructure over four years, with $600 million being allocated to the State's road network.

There was little joy for property owners and investors in the Tasmanian budget - although some commercial property transfer duties are to be abolished from July 1 and there was $99 million for public housing. The government did promise to review business tax and red tape. But don't they all say that?

While mainlanders like to joke about Tasmania's Budget (some call it "petty cash"), there's not much to criticise about a small state government that forecasts operating and fiscal surpluses for the next four years. Tasmania has maintained a budget surplus of $106 million and estimates this will rise to $203 million next year. Net liabilities (borrowings) will be reduced by $510 million to $2.4 billion by the end of 2008-09. At 3.25%, the state's economic growth is still above the long-term trend, employment growth is forecast at 2% in 2008-2009 and the State's net debt continues to be reduced.

The Budget was delivered amid tumult within the ranks of the Government. Premier Paul Lennon resigned in May and the government has had to withstand constant national media attention and environmental lobbying over the $2 billion Gunns pulp mill project. Perhaps that's why there was a nod to the ‘greenies' - the Budget provides $80 million to improve irrigation systems to help make the state "drought-proof".

At $627 million, the biggest slice of the budget pie was allocated to improving roads and transport. Like NSW and Victoria, the Tasmanian Government is spending money to improve its rail network -- $77 million in this case. The road infrastructure allocation includes $42 million on north-east freight roads and $36 million on the Brighton bypass.

Tasmania's health sector was the next biggest winner, with an allocation of $493 million. Almost half of this ($232 million) is going to the early stages of the new Royal Hobart Hospital. Health also gained $18.6million to implement new healthcare information technology.

Treasurer Michael Aird also put education high on the list of priorities with a $135 million allocation to Tasmanian schools. This includes $35 million to improve literacy among children and adults.

Aird says the 2008 Budget reinforced the state's Tripe A credit rating and will drive jobs growth, improve literacy levels and support those most in need with better community services and housing.

"It will also meet the challenges of climate change, urban renewal and demographic change," Aird says. "We are a government that is prepared to listen to new ideas and challenge the status quo."


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