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Federal revenue shortfall adds to budget woes
Updated May 08, 2012 22:33:03
The Federal Budget has delivered more bad news for the cash-strapped Tasmanian Government.
The Budget papers show GST revenue delivered to the island state will be $114 million less than forecast for the coming financial year, falling to $2.6 billion.
Looking ahead, the amount of GST revenue the State Government was expecting to receive over the next four years is forecast to fall by almost $0.5 billion.
But Tasmanian welfare organisations have welcomed the handouts for families in last night’s federal budget.
Those on the Family Tax Benefit, Part A will receive an increase in their payments from July 2013, when the Government estimates families will get an increase of at least $300 per year, if they meet new eligibility criteria.
Anglicare’s Chris Jones says Tasmanian families are among the poorest in the nation.
“What we’re concerned about is that we’ve actually got to ensure that Tasmanians, where we are financially disadvantaged, many families are doing it tough, we need to make sure that we hold our own.
“What we’ve heard from the Commonwealth budget is some good news, what we need to make sure though is that Tasmanians receive the benefits that they need so that they can live well,” he said.
There is $1 Billion in the budget over four years to trial the National Disability Insurance Scheme.
Read the rest, ABC Online here
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• Australian:
Cash splash takes us back to stimulus levels
by: ANALYSIS: GEORGE MEGALOGENIS
From: The Australian
May 09, 2012 12:00AM
THE big three expenditure items in the budget – welfare, health and education – will return to the cash-splash levels of the global financial crisis as Wayne Swan takes a radical path back to surplus by combining deep cuts with new spending.
The razor-and-handout approach is typified by a $966 million cut to defence spending in 2012-13, a new education handout to families worth $516m in the deficit year of 2011-12 and $426m in the surplus year of 2012-13. The theory is the government saves in net terms to impress the rest of the world while also giving extra relief to low- and middle-income families feeling the pinch from elevated energy and grocery costs.
Wayne Swan’s making a values judgment
by: Paul Kelly, Editor-at-large
From: The Australian
May 09, 2012 12:00AM
JULIA Gillard is right. This is a budget of redistribution that defines Labor values – from higher to lower income earners, from defence to social policy, from corporates to households, from deficit to surplus.
Amid massive political wreckage, this budget is Wayne Swan’s bid for vindication. The fifth Swan budget wants to return Australia to economic normality – unveiling a new era of surplus budgets in a deficit-laden world.
• MEDIA RELEASE
Tuesday, 8 May 2012
Business certainty destroyed on path towards budget surplus
Weaker than expected tax revenues and ongoing uncertainty for the non-resource sectors of the Australian economy continue to plague budget forecasts as the federal government pursues its fragile return to surplus plan in 2012-13, according to the Institute of Chartered Accountants in Australia (the Institute).
“The budget outlook shows that the slender $1.5bn surplus in 2012-13 is entirely dependent on a strong recovery in business and economic conditions outside of the non-resource sectors, but there is no compelling evidence that such an improvement will in fact materialise,” says the Institute’s General Manager of Leadership & Quality, Yasser El-Ansary.
Australian businesses continue to be concerned about volatility and uncertainty across Europe and other major developed countries, which are weighing heavily on medium and long-term decision making across the services, manufacturing and retail industry sectors.
“The short-term horizon does not look to be improving; in fact it looks more like it’s deteriorating,” according to Mr El-Ansary.
These factors will have a significant bearing on whether or not the budget will return to surplus in 2012-13. “These major downside risks point to a conclusion that now is not the right time to be withdrawing more than $45bn of expenditure from the economy.”
Mr El-Ansary says, “Businesses continue to need the ongoing support from investment in major capital and infrastructure spending programs in order to help shield them from the negative effects of the fallout from the ongoing European debt crisis.”
In pursuing its return to surplus target in 2012-13, the government tonight announced it is abandoning its two-year long commitment to Australian businesses to make the tax system more competitive by reducing the corporate income tax rate, which was scheduled to come into effect from 1 July 2012.
“Australian business confidence was already sitting at low levels, but tonight the government’s announcement will push that confidence to a new low with their decision to walk away from the commitment to deliver a lower headline corporate income tax rate,” says Mr El-Ansary.
• Andrew Wilkie …
A STATEMENT FROM ANDREW WILKIE ON THE FEDERAL BUDGET
Tonight’s Federal Budget is a mixed bag hampered by the Government’s political decision to bring in a surplus before the next federal election.
On the one hand the Budget contains some positive measures, for example the new supplementary payment to the unemployed, students and parents with young children and the increases to the Family Tax Benefit Part A.
In Denison, 8,400 people will be eligible for the supplementary payments of $210 for singles and $350 for couples every year. Seven thousand families in Denison will benefit from the increases in the Family Tax Benefit Part A and will receive up to $300 a year extra for one child and up to $600 a year for two or more children. This will help them deal with the increasing cost of living.
Another positive is tax relief for the 10,800 small businesses in Denison who will be able to carry back tax losses, and immediately write of assets of up to $6,500 to help them survive and prosper through the economic downturn.
Locally the Budget also confirms $8.7 million in funding for the KGV redevelopment in Glenorchy which will provide a vital boost to the local economy. There’s also $2.3 million for construction of the Menzies building which will provide construction jobs and space for the institute to continue its life-saving research.
I also welcome the move towards a National Disability Insurance Scheme with $1 billion over fours years to kick-start the reform. This is genuinely nation-changing reform that will greatly improve the lives of people with disabilities and their carers.
Regrettably though the Federal Budget represents a missed opportunity to progress real reform in mental and dental health. While the blitz on dental waiting lists is welcome, it is a drop in the ocean and does not go nearly far enough towards universal basic dental health care for all. Sadly, mental health appears to have dropped off the Federal Government’s radar in this Budget.
Another disappointment is the cut to foreign aid and the Government’s delay on meeting its promise to spend 0.5 per cent of Gross National Income on helping the world’s poorest people. Seems the world’s most disadvantaged and vulnerable peoples were an easy target for a government intent on delivering a politically motivated surplus.
I’ll need to study the detail of the Budget before I can say for sure how I’ll vote on specific measures. But one initiative I still need to be persuaded to support is the Schoolkids Bonus because I’m yet to be convinced of the merits of de-linking the payment to education expenses, especially after learning that 80 per cent of eligible families in Denison are already claiming the education tax refund. The experience of the global financial crisis stimulus payments was that some of the Government largess was squandered on booze, the pokies and televisions.
• Jan DAvis, TFGA …
Danger signs for Tasmanian economy post-2014: farmers
Tasmania’s peak farm business organisation today warned that the sub-text of yesterday’s Federal Budget for Tasmania sounded alarm bells for the state economy two years down the track.
Tasmanian Farmers and Graziers Association chief executive Jan Davis said the forward estimates showed that by 2015/16 West Australians stood to retrieve only 30 per cent of the GST that they paid whereas Tasmanians would expect to receive more than 140 per cent of what they paid. (The current figures are 55 per cent and 160 per cent respectively.)
“That’s simply not a tenable position,” Ms Davis said.
“The Gillard government is already under serious pressure from the boom states to review this imbalance and Opposition Leader Tony Abbott is making different noises about the split of GST revenue to the states under a coalition government, depending on the state in which he is speaking.”
Ms Davis said both major parties had referred to the need for Tasmania receiving special consideration, but this understated the clear message of the Budget. Tasmania was already down about $100 million a year in GST revenues and it was inevitable the situation would worsen.
“The writing is on the wall,” Ms Davis said. “Increasingly, we are going to have to learn to stand on our own two feet and we don’t have a lot of time to examine the options for doing so as 2015 is not far away. This should be really sobering for all Tasmanians.
“We have been telling the government repeatedly that agriculture is the mainstay of the Tasmanian economy and has to continue to be so. It is what we do best here. It is what Tasmania should be all about.
“What we have to do is to grow the business. To do that, we have to make Tasmanian agriculture more competitive by removing impediments that will prevent farmers from doing more, better.
“If the farming and agribusiness sector grow, it will create more wealth for the state, it will create more local jobs and it will generate more export income. That is how Tasmania will pull its weight.”
Ms Davis said Tasmania was at the crossroads, regardless of which party was in power.
“The time for consultation is upon us. No government can do this on its own but it has to get its priorities right. It has to listen and to engage and to make hard decisions if we are to get through this.”
Ms Davis said the Budget had gone some way in recognising the key role agriculture was playing in underpinning the nation’s economy.
While detailed analysis had yet to be completed, there were some positive commitments for the sector. Additional funds for biosecurity and natural resource management activities were particularly welcome.
“Nonetheless we still have a long way to go to ensure Australian farmers remain competitive,” she said.
“In order to build a really strong platform for future growth the federal government needs to invest in productivity based research, infrastructure, and tools to manage risk.”
•WILKIE FOCUSSING ON URGENT NEED FOR FEDERAL ASSISTANCE FOR TASMANIAN HEALTH SYSTEM
The Independent Member for Denison, Andrew Wilkie, has written to the Prime Minister, Julia Gillard, calling for a $400m federal rescue package for Tasmania’s public health system.
“Last night’s Federal Budget is not the end of the story for Tasmania’s public health system,’’ Mr Wilkie said.
“In recent weeks I’ve been in talks with the Prime Minister and other senior members of the Government, as well as with Tasmanian Health Minister Michelle O’Byrne, about the urgent need to put Tasmania’s public hospitals on a sustainable footing.
“Frankly I don’t know if I can succeed in getting federal assistance, but I do hold out hope that the severity of the Tasmanian health crisis and the unusual circumstances in Canberra might influence the Federal Government to get involved and help us out.”
Download copy of the letter:
Letter_to_PM_May_9,_2012.pdf
• Christine Milne: Biodiversity Fund delivers $271 million for climate and regional Australia
Wednesday 9 May 2012
The Biodiversity Fund established as part of the Multi-Party Climate Change Committee agreement has allocated $271 million to its first projects which will bring resources to regional Australia to support communities and protect the environment.
“The fund of almost a billion dollars over 6 years is one of the aspects of the climate package that we are most proud of,” Australian Greens Leader, Senator Christine Milne, said.
“This program will bring great benefits to regional Australia where communities have been looking for cash to help them steward the land by protecting biodiversity and storing carbon.
“It’s great to see projects that focus on reconnecting fragile ecosystems and working with farmers to develop new business models getting funded in Tasmania.
“These successful first round projects show that NRM Regions, environmental organisations and land managers are ready and willing to work together to reward stewardship or our precious biodiversity, tackle weeds and increase carbon stores.
“This is $7.16 million of funding for Tasmania’s environment and climate resilience that wouldn’t have happened without the Greens, and it’s a down-payment on five more years of funding to come.
“We are very keen to see the money maximising biodiversity and climate outcomes and helping communities across the country, and will be closely examining the first round of funded projects to make sure the fund is delivering on that.”
Successful projects can be found at
http://www.environment.gov.au/cleanenergyfuture/biodiversity-fund/projects/round1.html
• FEDERAL BUDGET DELIVERS GREEN DIVIDEND TO TASMANIANS
Nick McKim MP
Greens Leader
The Tasmanian Greens today welcomed the ‘greening’ of the Federal Budget, which had delivered on a number of key Greens initiatives that would ease cost of living pressures for low-income earners.
Greens Leader Nick McKim MP said that although the Greens were disappointed with the failure to fund an increase in the Newstart allowance, measures including the boost for dental care and increased support for low income earners were welcome relief for many Tasmanians.
“Thanks to the hard work of the Australian Greens on carbon and health, this Federal Budget delivers a great, Green financial dividend for Tasmanians,” Mr McKim said.
“Despite the expected fall in GST revenue, Tasmanians will disproportionately benefit from a lot of the measures in the Budget aimed at low income earners.”
“Because of its focus on support for low income earners and initiatives such as funding for dental care, this is a Federal Budget with a strong shade of Green.”
On dental care:
“This funding for dental heath will reduce some of the pressure on public hospitals, which currently spend thousands of hours every year doing emergency dental surgery.”
“A new national dental scheme will be one of the biggest reforms to Australia’s health system in a generation and thanks to the Greens we have taken a big step toward that goal.”
On education funding:
“The Greens want the recommendations from David Gonsky fully funded, and we’re very disappointed that it was left out of the budget.”
“The money that was saved by the Greens negotiating to defer tax breaks for big business should have been used to fund the $5 billion in education spending recommended by Mr Gonsky.”
On the State Budget
“Since the last budget was handed down, the Greens have said consistently that the fiscal strategy needs to be relaxed to prevent another horrendous State Budget that cuts services to the Tasmanian people to an unacceptable level.”
• ABC Online, via Jude, in Comments: Senator Sherry brings forward retirement …
…As Lin Thorp throws her hat in the ring. ABC Online HERE The Tasmanian Premier says she would support the nomination of former Labor Government Minister Lin Thorp if she enters the contest for a Labor Senate seat which becomes vacant next month. Longtime incumbent and former frontbencher Nick Sherry has told the Tasmanian branch of the Labor Party that he will leave the Senate in June. The party needs to choose a replacement by June the 19th, when the Tasmanian Parliament returns from recess, and two high profile Labor figures have already suggested they are interested, including Lin Thorp. The Secretary of Unions Tasmania Secretary Kevin Harkins is also considering his options, but has not decided whether he will nominate. Mr Harkins’ bid for a Senate spot in 2009 was thwarted by the intervention of the then-Prime Minister Kevin Rudd.
