Welcome to Font PR’s 2015-16 State Budget wrap for the second Liberal budget during this term.
Font Managing Director Becher Townshend has provided his insight into the budget below, drawing on his experience as a political journalist and government relations specialist.
Along with Becher, John Barker of John Barker and Associates has provided his thoughts, using his vast knowledge of the government sector to pinpoint the key take-aways.
For those with less time to spare, we have put together a video of Becher’s summary and compiled a budget at a glance, outlining the key facts and figures from the budget, as well as a budget summary for the majority of the state’s portfolios.
Click below to reach a selected portfolio summary:
State Growth, Health and Human Services, Education and Training, Primary Industries and Water, Resources, Tourism, Arts, Energy, Environment, Parks and Heritage, Planning and Local Government, Police and Emergency Management, Infrastructure, Justice and Corrections, Sport and Recreation.
Becher’s 2015-16 State Budget wrap
Year two of the Hodgman Liberal Government in Tasmania and it would be fair to say in a budgetary sense they have delivered, with predictions that the state will be in surplus three years ahead of schedule.
This represents a $227.1 million dollar turn around in the state’s fortunes and means by the end of the 2016-17 financial year, Treasurer Peter Gutwein is predicting a budget surplus to the tune of $100 million.
No doubt this explains the many delighted smiles from government members in the lead up to today’s budget, with Treasurer Peter Gutwein sounding like the cat that got the cream when he predicted the budget would be ‘back in the black’ by the end of next year.
To achieve this, the Tasmanian Government has shown a spending discipline rarely seen recently in any state government, or for that matter a federal government, that has held back expenditure growth to 1.1 per cent, while income has increased by 2.8 per cent.
While it might sound like a simple rule, the strategy here for this government has been spend less than you earn and the benefits will flow.
This restraint even extends as far as an announcement that parliamentarians’ pay increase will be limited to two per cent for this financial year – it is rare you will see politicians pay rates proudly announced in a budget speech!
On top of this strong fiscal restraint has been a fair bit of uplift, in part thanks to the windfall gain from the GST of some $151 million but also an increase of some $43.9 million in local taxation revenue.
Meanwhile, there will be no new taxes or increases.
However Treasurer Gutwein is quick to highlight this is not the time to rest on these achievements and quick to point out that while the state might have won this round over the GST, the war is far from over.
“We know inevitably, over time as our economy strengthens, our GST share will decline,” Mr Gutwein said.
“So we have instead invested those windfall gains into productive job-creating infrastructure that will provide benefits long after the money has gone.”
The well-publicised infrastructure fund will see some $315 million spent over the next four years to create some 8,000 new jobs.
Projects include some $120 million for rails, which includes the $33 million earmarked for international shipping that was scrapped as a result of changes to the Tasmanian Freight Equalisation Scheme.
A further $60 million Northern Cities Major Development fund is hoped to transform Launceston, Devonport and Burnie, with the Coordinator-General working on the Devonport Living City project, the Launceston University Campus relocation as well as an increased presence for the university in Burnie.
Irrigation will get $30 million, while $8 million will be spent over two years for a new Business and Job Attraction Scheme designed to attract call centres and the like to the state.
As reported, the $20,000 First Home Builders Grant will be extended until the end of the calendar year, while a further $7.9 million will be spent on tourism over the next four years.
For Forestry Tasmania, another $8 million will be invested in its operations but the Treasurer is at pains to say the funds are not for commercial operations, but for its firefighting and non-commercial activities such as roads and access to tourism sites.
On the North-West Coast an additional $34.5 million will be spent on construction including a series of high school upgrades at Smithton, Latrobe and Burnie.
To highlight his point and confidence in the direction the state is heading, Mr Gutwein has a simple message to those who have left Tasmania in the search for employment, we want you back.
“If you wear a ‘high-vis’ vest and are currently working interstate or overseas hear this message – there is work for you in Tasmania, and we want you back.”
Domestic violence is a priority this year, with $16 million for a whole of government approach to family violence, and further indirect funding of over $24 million across the departments of Health and Human Services and Education.
Elsewhere in the budget, the fiscal strategy has been maintained, with funding levels for health and education maintained and increased to that just above the consumer price index.
However, Mr Gutwein was at pains to highlight that the additional funds were not to reinstate lost public servants, but to ensure front line services were maintained and improved.
“We set a target of 1,200 Full Time Employee (FTE) reductions over the Forward Estimates period and are on track to achieve the planned FTE for this year of 821 that we outlined,” Mr Gutwein said.
“I want to be very clear about this: were the structural savings measures we introduced last year to be unwound, the state would return to the dire financial circumstances we are now recovering from.”
In terms of reform, the White Paper on Health reform is to be finalised, while there is $1.7 million for planning reform and $400,000 to examine council reform.
Clearly, with a bounce in the polls earlier this week, there is little in this budget to suggest that the increase in support of the government will not continue.
Treasurer Peter Gutwein’s second State budget is a good news story for Tasmanians.
It significantly builds on increasing business confidence, provides a huge incentive for the slower recovering North and North West regions and delivers no new taxes or new savings measures. It holds spending growth to 1.1% per annum while revenue growth is estimated at 2.8% per annum.
The budget returns to surplus in 2016/17 three years ahead of schedule with a cumulative surplus of $310m over financial estimates.
The budget is built around a $315 million package over 4 years to create 8,000 new jobs and an extensive infrastructure program.
- $130 m for capital works projects in the North and North West recognising the need to accelerate economic recovery (this in addition to existing infrastructure programs and will include $60 m for a northern infrastructure fund),
- Extend the $20,000 First Home builder support for 6 months with $10,000 support for the remaining 6 months (since 1 Jan 2013 $38 m in grants approved),
- $8m for high priority maintenance in Tasmanian state parks,
- $16m to Government Agencies to tackle family violence, in addition to $24m across Health and Education for family violence services and commitment to deliver a detailed action plan in August 2015,
- $20m over four years for the rail network, access to a further $60m on a $1 for $1 basis and redirection of the $33 m over 3 years previously allocated to a direct export shipping service,
- $60 m provided to Northern Cities Major Development Initiative to redevelop Launceston, Devonport and Burnie with $450,000 to commence work on the Devonport Living City project,
- $8 m over 2 years for a new Business and Job Attraction Scheme.
- $6 billion over the forward estimates allocated for health
- Single state wide health service to commence 1 July
- $100 m additional funding for public hospital services including emergency and elective surgery
- $14 m for patient transport services to support reforms to the health system
- $4.8 m for residential drug rehabilitation beds.
- A record $1.44 billion allocation for education and training
- 6 more schools to extend to years 11-12 in 2015/16
- $77.7 m in 2015/16 to honour the Government’s Gonski commitment
- $17.7 m over 4 years for a literacy and numeracy program
- $25.7 m in high school upgrades
Infrastructure capital works expenditures
- In addition to the $130 million North / North West Tasmania package and $120 m rail funding
- $496 m to the continued development of the Royal Hobart Hospital
- Continued funding of the Midlands Highway upgrade
- $728 m roads and bridge improvements
- $24 m to encourage and facilitate exporation and mining development
- Confirmation that there will be no ongoing operational subsidy for Forestry Tasmania
- $500,000 over 2 years to review the Regional Forests Agreement
- $1 m over 4 years to grow private agri forest sector
- $$1.2 m over 2 years for the Ministerial Advisory Council on Forests
- $4 m for fire fighting
- $4 m for maintaining forestry roads to tourism sites
- $30 m for tranche to irrigation schemes
- $4 m on bio security measures
- $4.6 m for agricultural research and on farm productivity
- $7.9 m over the budget estimates in growing the visitor economy
- $920,000 allocated to regional tourism organisations
- $400,000 to boost business events and visitation
- $2.8 m to international engagement activities and investment flowing from the recent interaction with China
Other of note
- $1.7 m to accelerate work to complete and introduce a single planning scheme
- $300 m on concessions for Tasmanians
- Funds to rebuild police to 1228 by 2018
- 1.2 m for Stage 1 of St Helens Bar way
The Treasurers budget has reinforced that Tasmanian is open for business, indeed he has encouraged mainland business to relocate to Tasmania.
It further enhances a bright future for the State. It is now up to the people and businesses in the State to grasp the opportunity.
- Deficit for this financial year is $58.5 million, and a surplus is forecast of $101.5 million for 2016-17, some three years ahead of predictions for last year’s budget.
- Growth for this financial year is expected to be 2.5%, up by .75% from 2014-15
- Net debt is down to $58.5 million from a predicted $188.3 million as at 30 June 2015, and will be a positive $252.6 million by the end of the 2016 financial year.
- Revenue growth to government is expected to be 2.8%, while expenditure growth will be capped at 1.1%.
- Commonwealth grants and GST will make up 65.1% of total state revenue, up from 59.5% two years ago.
- Unemployment is expected to continue to fall from 7% to 6.75% down from 7.7% at the end of 2013-14 .
- Total tax revenue is forecast to be $1,027 million – an increase of $43.9 million.
- A $315 million jobs package, helping to create 8000 jobs around the state, by investing in projects across nearly every government portfolio. These projects include:
- $60 million for the Northern Cities Major Development Initiative, focussed on Launceston, Burnie and Devonport.
- $90 million for irrigation
- $5 million for the extension of the First Home Builders Boost to the end of 2015
- $3 million for the Caterpillar Transition Taskforce
- $1.6 million for supporting UXC and Serco
- confirmation of $31.5 million for the refurbishment of the Spirit of Tasmania.
- A total of $90 million in projects across the north and north east of Tasmania.
- A further total of $89 million in projects for the North West Coast.
- $8 million to pursue job and business opportunities to help grow our population.
- $3.25 million over four years to deliver on engagement with international trade partners and to explore new markets.
- $100 million investment in essential public hospital services including elective and emergency surgery.
- $3 million for the Hospital Alternative Program.
- $8.3 million for the maintenance and upgrades of hospitals and health centres across Tasmania.
- $2.4 million over four years for Children and Adolescent Mental Health Services.
- $10 million for patient transport infrastructure.
- $14.5 million over four years for the North-West Regional Cancer Centre at Burnie.
- Securing of $191,000 in Federal funding to deliver 1000 more breast screens for women aged between 70-74.
- $16 million for a whole of government approach to respond to family violence.
- Indirect annual funding in excess of $24 million across the departments of Health and Human Services and Education for services related to family violence.
- $720,000 over four years to support victims of family violence and assist with the delivery of preventative and support programs.
- $88,000 to support Tasmania’s membership of the Our Watch Foundation.
- $260,000 ongoing annual funding for Volunteering Tasmania.
- $130,000 per annum to help establish a new Community Participation and Appeals Program to held the fundraising efforts of the state’s community organisations.
- $1.1 million towards Hobart’s Memorial Avenue on the Queens Domain.
- $6 million for a new supported accommodation facility for young people in the North West.
- $1.2 million over the new two years to implement Phase 2 of the One Door Project.
- $255.28 million in 2015-16 for more than 230 community sector organisations in Tasmania.
- $92.8 million over four years to assist with the introduction of the National Disability Insurance Scheme (NDIS).
- $1.5 million to provide support over the next three years for those Tasmanians not included in the first stage of the NDIS, as well as $250,000 to help prepare the workforce for the scheme’s rollout.
- $800,000 to provide best practice autism care.
- $300,000 over two years to support the Elder Abuse Strategy.
- $440,000 over two years for Children and Youth Services.
- $300 million to fund concessions to help disadvantaged and vulnerable Tasmanians.
- The Tasmanian Government is investing a record $1.44 billion in education and training over the next four years.
- Of this, $68 million over four years will go towards the Reinvigorating Tasmanian High Schools program, particularly benefiting high schools in the north and north west.
- A further six rural and regional high schools will be funded to Years 11 and 12.
- In 2016, $77 million will be invested as part of the Students First program, targeting those most in need.
- More than $6 million will be invested in new infrastructure for students with a disability.
- In addition, funding will increase to more than $70 million for students with a disability.
- $4 million investment in biosecurity including $2 million in additional funding for detector dog teams and $2 million to modernise biosecurity infrastructure.
- $24 million over four years to facilitate exploration and mining development.
- An additional $500,000 allocated to the relocating of Mineral Resources Tasmania to Burnie.
- No further funding to Forestry Tasmania’s commercial operations.
- $4 million to fund Forestry Tasmania’s firefighting obligations.
- $4 million for Forestry Tasmania’s non-commercial activities.
- $250,000 over two years to implement the outcomes of the Forestry Tasmania review.
- $500,000 over two years to progress the review of the Regional Forest Agreement.
- $1 million over four years to grow the private agri-forest sector.
- $1.2 million over two years for the Ministerial Council on Forests.
- $8 million to be invested in tourism marketing and industry development.
- Additional $4 million to be invested in marketing.
- Break down of the $8 million includes:
- $3 million over three years to Tourism Tasmania
- $3 million over three years to promote tourism growth
- $920,000 over four years for Regional Tourism Organisations
- $610,000 over three years for a Regional Events Start-Up Program
- $400,000 over four years to increase Business Events.
- $500,000 in operational funding for TMAG in 2015-16 with an additional $250,000 for 2016-17.
- A further $460,000 for works on the roof of TMAG’s 1966 building.
- $2.5 million under the Tasmanian Energy Strategy to progress a number of initiatives, including preliminary work on the feasibility of a second Interconnector and strategies to increase hydro generation by 10%.
- $2 million will be made available over the next two years to implement energy affordability programs targeting vulnerable households.
- New funding of $8 million over two years has been allocated for high priority infrastructure renewal and maintenance in Tasmanian Parks and Reserves.
- This will include the continuation of work commenced in 2014-15 for the Three Capes Track, the South Coast Track and the development of a multi-purpose visitor centre at Woolmers Estate.
- $24.5 million has been allocated over the next three years to continue the implementation of the fuel reduction burning program, to mitigate the risk posed by bushfires to people and property.
- A second round of expressions of interest for new tourism experiences has also been provided for.
- $400,000 to investigate local government reform.
- Continued investment of $33.5 million over four years to restore police numbers to 1228.
- $15.2 million over two years to deliver a common new dispatch system for police, ambulance, fire and state emergency services.
- $2.5 million for the purchase of new fire trucks.
- $1.806 billion overall for infrastructure for all departments.
- Department of State Growth is set to receive 40%, equalling $787 million, with $728 million of this going to improving the state’s roads and bridges.
- $5 million for the Regional Revival Fund for job creation.
- Two projects at Orford and St Helens will receive $1.178 million from the State Government over two years, along with $250,000 from Marine Safety Tasmania and local councils to encourage economic growth and job creation on the East Coast.
- $228 million to fund projects under the 10 Year Action Plan for the Midland Highway.
- $59.8 million will go to matching the Federal Government’s input to Tasmania’s Freight Rail Revitalisation Program.
- The Tasmanian Government is also committed to working collaboratively with the Federal Government to help deliver an $8 million pedestrian bridge across the Tasman Highway to link Memorial Avenue and the Cenotaph.
- Other major commitments include:
- $270 million over the next four years to maintain existing road infrastructure
- $32 million to begin construction of the Brooker Highway, Elwick Road, Goodwood Road and Howard Road intersections
- $21.9 million for continued development of the Huon Highway/Summerleas Road project
- Remaining $8 million of the $15 million to complete stage two of the South Arm Highway/Rokeby main road works
- $12 million for the completion of the Tasman Ramps project
- $13 million for safety and capacity upgrades on the Esk Main Road
- $10 million for further bridge strengthening on the Esk and Tasman highways
- $7 million to complete an upgrade of the west coast’s Murchison Highway
- $8 million to improve traffic on the Huon Highway at Glendevie.
Victims of crime
- $100,000 a year for the Victims Support Service.
- $1.3 million to enable the recovery of profits of crime by the Department of Public Prosecutions.
- $2.6 million for planning reform including $1.7 million to accelerate the delivery of the single state wide planning system.
- $230,000 for the Office of Racing Integrity to employ a Steward Investigator and a Racing Integrity Manager.
- $750,000 for the Masters Games.