2016-17 State Budget wrap

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Welcome to Font PR’s 2016-17 State Budget wrap for the third 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, Education and Training, Primary Industries and Water, Resources, Tourism, Arts, Energy, Environment, Parks and Heritage, Planning and Local Government, Police and Emergency Management, Infrastructure, Human Services, Corrections, Veterans Affairs, Small Business, Forestry, Aboriginal Affairs, Sport and Recreation.


Becher’s 2016-17 State Budget wrap


Becher Townshend – Managing Director, Font PR

Third time lucky for Treasurer Gutwein.

Now in its third year and it is steady as she goes for Hodgman Liberal Government which continues on theme of slow and steady rebuilding of the state’s finances with little, if any surprises.

The centrepiece for Treasurer Peter Gutwein is being able to deliver on his promise of a surplus by the end of the 2016/17 financial year, despite significant headwinds compliments of the energy crisis ($100 million.), summer bushfires ($31 million.) and a loss of nearly $500 million. in GST revenue over the next four years.

The predicted surplus has fallen from $100 million last year, down to $77.3 million reflecting the challenges the Government has faced and sees promises to reduce the car registration costs delayed for a further year.

However, it is still a surplus and reflects a steady and determined path that has been undertaken by the Hodgman Government of prudent financial management in the capable hands of the Treasurer.

While the Government is keen to talk up the economy, the Budget papers indicate there are still challenging times ahead, with growth of the Tasmanian economy expected to shrink from 2.5 per cent this year, to 2.25 per cent in 2016/17.

In addition, the unemployment rate is predicted to remain steady at 6.75 per cent over the next three years, so while business confidence may be at new highs, the national and global economic slowdown is likely to take its toll.

This may well explain the Government’s decision to re-introduce the first home builders grant to $20,000 which is backdated to January 1, 2016 and considered by Treasury to have a meaningful impact on the Tasmanian economy.

In terms of new initiatives, there are few sweeteners this time round, with the State Government probably saving up any big initiatives for next year’s pre-election budget.

However, there were some bright lights, such as a long overdue $18 million to Metro for 100 new buses, while the papers confirm a fighting fund of $80 million to replace the aging Spirit of Tasmania vessels.

As a result of the energy crisis a $10 million energy efficiency fund for small businesses and residential users has been created offering low interest loans for meaningful energy reduction initiatives.

In terms of funding for Education and Health, the Government is continuing on with its existing commitments, with additional funds to ensure the Royal Hobart Hospital upgrade is completed.

Overall, there will be an extra $50 million each year for Health, while Education will see some $113 million rolled out over four years for continued upgrades of our schools infrastructure.

The affordable housing action plan will see an extra $60 million over three years to see extra accommodation for those in need, while Police will get an extra $5 million to accommodate the force in rural and regional areas.

The better cities plan, which works to the moving of the University to Burnie’s West Park and Launceston’s Inveresk as well as Devonport’s living city sees an extra $30 million making the likelihood of a Federal Government announcement in Launceston just about a forgone conclusion.

These Infrastructure initiatives combined add to the $425 million industry support and jobs package announced last year, which are designed to continue to stimulate the economy, particularly in the north and north-west.

Other initiatives include over $2 million for Tourism including aviation market development, the Tasmanian brand as well as Events Tasmania.

While funding for the creation of a single State-wide Planning Scheme continues at $400,000 with some $1.9 million for Iplan, a system to make planning applications easier.

Elsewhere there are funds to deal with the forest residues in the south of the state, $1.4 million for geo services in the mining industry and $2 million for bio security.

In summary it would be fair to say that while there are no surprises in the budget, sometimes this can be a virtue with the Government setting the course and sticking to its guns.

This has allowed Treasurer Peter Gutwein to, over a three year period, create a sure and steady path that leads the state’s finances to positive and sustainable outcome with a surplus of some $77 million.


John Barker – John Barker & Associates

The 2016/17 Tasmanian State budget is a responsible steady document. It provides a surplus, for the first time since 2010/11, of $77 million, 3 years ahead of schedule.

This budget compliments the Tasmanian economy which is growing at its fastest rate in 6 years, business confidence amongst the highest in Australia and a significantly improved unemployment rate.

Across the budget and forward estimates period an operating surplus of approximately $50 million is predicted, in stark contrast to cumulative deficits of $1 billion predicted when the government took office in March 2014.

The budget has been prepared in difficult times. Tasmania has lost more than $500 million in GST payments and its timing clashes with a Federal election, yet this budget has no net debt. There are no new taxes or public sector cuts.

The estimated growth in expenditure is estimated at 1.6% per annum through to 2019/20. During the same period growth in revenue is expected to be 2.3%.

$425 million is being provided for industry support and jobs package.

The Tasmanian economy is resurrected.

Education

  • A record $1.48 billion is provided for education and training.
  • A record $113 million is invested on school and TAFE infrastructure upgrades on the biggest ever education infrastructure package from a Tasmanian Government. This includes new projects at 14 primary schools, high schools and colleges and training infrastructure.
    • 18 high schools will extend to years 11 and 12, and the budget provides for support staff and infrastructure
    • $3 million over 4 years for a program to combat unacceptable behaviours especially bullying in schools.
    • Students First education reforms will be fully met.

Health

More than $515 million is invested in frontline health infrastructure.

  • $457 million is provided to complete the Royal Hobart Hospital redevelopment.
  • $7.9 million will be invested in the upgrades to the Children’s Ward at the LGH.
  • Royal Hobart Hospital Pharmacy will receive a $3.7 million facelift.
  • $29.5 million over 4 years to support One Health System reforms.
  • $9.5 million in capital funding for improved health transport and coordination infrastructure.
  • $17 million to improvement health transport services operations.
  • Allocates $600,000 to the Office of the Public Guardian which protects the rights and interests of people living with disability.
  • A continuation of the $76 million investment to reduce elective surgery waiting lists (from July Mersey Community Hospital will become a community elective surgery centre).
  • $1.1 million is provided to the continued construction of a new St Helens Hospital.
  • $1.6 million targeting smoking and obesity.
  • $2 million for Tasmanian government schools to promote health and wellbeing.
  • $3 million to support the implementation of the ‘Rethink mental health plan’.

Vulnerable Tasmanians

  • A total of $900 million is provided over the forward estimates which includes:
    • $60 million over 3 years to Affordable Housing Action Plan including the construction of 941 new homes.
    • $20 million over 4 years to the strong families, safe kids program.
    • $550,000 to the child protection information system.
    • Continuation of the $25.6 million Family Violence Action Plan.
    • $17.3 million towards the NDIS.

Community Sector Organisations

  • Record $260 million for base funding indexation and equal remuneration.

Northern Major Cities Development

  • Additional $30 million to the Northern Cities Development initiative.

Fishing and Aquaculture

Assistance to the Oyster Industry following the outbreak of POMS includes:

  • Additional allocation of $600,000 and $400,000 to the Tasmanian Shellfish Quality Assurance Program.
  • $861,000 waiving industry fees.
  • $400,000 to wild fisheries management program.
  • $1.2 million over 2 years to the Fisheries Integrated Licencing program.

Tourism

$8.8 million is allocated to support strong tourism growth including:

  • $1.25 million to Aviation Market development fund.
  • $650,000 to strengthen Tasmanian Tourism Brand.
  • $6.3 million to boost East Coast tourism.
  • $4 million towards construction of the third stage of the Three Capes Track and approximately $15 million Cradle Mountain Master Plan.

A new fund to replace TT-Line’s two Spirit of Tasmania ferries is created. TT-Line will provide two special dividends worth $80 million to start the replacement fund.

Prison

  • $4.7 million over the forward estimates to increase accommodation capacity for minimum-security female inmates by 20 beds.
  • $693,000 in additional funding for the Tasmanian Prison Service to upgrade

Forestry

The government is pursuing the rebuild of the industry and a solution for the Southern Forest Residues dilemma. Nothing specific has been referred to in this budget document. The budget however allocates $1.25 million a wood and fibre processing program.

  • $500,000 is provided for strategic marketing of forest products.

Mining

  • $1.4 million for geoscience in North West and West.

Small business and training

  • $600,000 for small business apprenticeships and traineeships.
  • $900,000 over 2 years to support young Tasmanians in growth industries.

Energy Sector

  • Energy Sector in partnership with Aurora Energy a Tasmanian Energy Efficiency Loans Scheme will facilitate up to $10 million in no interest loans to support small business and households.

Metro Tasmania

  • To accelerate Metro Tasmania’s bus replacement program $18 million is provided to assist the purchase of 100 new buses.
  • A further $13 million is provided to strengthen Metro Tasmania’s balance sheet for this program.

Roads

  • Interestingly nothing specific has been mentioned in the budget speech relating to significant road infrastructure program. I will provide more information in due course.

Conclusion

Strong financial control has delivered a surplus and the impressive infrastructure program continues.

The third Hodgman budget builds on the general business and community confidence.


The budget at a glance

  • Deficit for the current financial year is $58.5 million, and a surplus is forecast of $77.3 million for 2016-17, which is some three years ahead of predictions for last year’s budget, but $22 million. down on last year’s estimate.
  • Growth for this financial year is expected to be 2.25%, down by .25% from the current financial year of 2.5%.
  • Net Debt is now positive at an estimated $252.6 million for this financial year, increasing to a positive $301.3 m. by the end of next financial year.
  • Revenue Growth to Government is expected to be 2.3% over the forward estimates, while expenditure growth has blown out to 1.6% over a capped 1.1% growth.
  • Commonwealth Grants and GST will make up 65.2% of total state revenue, up from 59.5% three years ago.
  • Unemployment has fallen to 6.75% but it is not predicted to change over the next two years.
  • Total Tax Revenue is forecast to be $1,055.6 million of a general government sector total revenue estimate of $5,573.7 million.

Portfolio summary

State Growth

  • $60 million for investment in infrastructure projects in Launceston, Devonport and Burnie.
  • $30 million allocated to support development in the north of the state.
  • $13.9 million to establish the Community Infrastructure Fund with an additional $5 million cash injection.
  • $100,000 of continued investment in the Code Club to provide young Tasmanians with the opportunity to learn coding.
  • $50,000 contribution to the Integrated Marine Observing System specialising in oceanic research and innovation.
  • $60,000 for the Inspiring Australia program to match the Federal investment made under the Australian National Science Engagement Strategy.
  • $50,000 for the TasICT ‘Generations’ program aimed at addressing shortages in Science, Technology, Engineering , Maths and ICT skills.

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Health

  • Additional $50 million for frontline health services.
  • $515 million into frontline health infrastructure including:
    • $457.2 million for the Royal Hobart Hospital redevelopment.
    • $3.8 million to upgrade and expand the RHH pharmacy.
    • $7.9 million to upgrade the Launceston General Hospital’s children’s ward 4K.
    • $8.1 million for the St Helens Hospital Redevelopment.
    • $16.5 million for a Glenorchy health centre.
    • $5.9 million for a Kingston health centre.
  • $5.4 million to assist in in alleviating emergency department waiting times through a new Patients First scheme.
  • $1.4 million over four years in Extended Care Paramedics and a First Intervention Vehicle for the Southern region.
  • $2.6 million to support priorities (smoking and obesity) in our Healthy Tasmania Five Year Strategic Plan.
  • $2 million to support Tasmanian Government schools to promote student health.
  • An additional $3 million over four years to deliver the Government’s 10 year Rethink Mental Health Plan, along with strategies for suicide prevention.

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Education and Training

  • $1.48 billion investment into education and training to create a job-ready generation.
  • $134 million committed to fund six years of Students First (Gonski).
    • $87.4 million investment for 2016-17.
  • $3 million for TasTAFE for new equipment and technology for the job-ready Tasmanian workforce.
  • $11 million for targeted literacy and numeracy support as well as Science, Technology, Engineering and Mathematics (STEM) programs.
  • $5.48 million towards combatting bullying to be divided between new and existing programs and organisations.
  • $2 million allocated to support Tasmanian Government schools for student health and wellbeing in low socio-economic communities.
  • $110 million capital investment over four years for new infrastructure commitments:
    • $5.5 million Austins Ferry Primary School.
    • $1.75 million East Devonport Primary School.
    • $4.5 million East Launceston Primary School.
    • $2.5 million Hobart College.
    • $3 million Lenah Valley Primary School.
    • $1.75 million Montagu Bay Primary School.
    • $3 million Queechy High School.
    • $2.5 million Riverside Primary School.
    • $2.5 million Snug Primary School.
    • $1.75 million Somerset Primary School.
    • $3.75 million Sorell School.
    • $5 million St Marys District School.
    • $4 million Tasman District School.
    • $5.5 million Windermere Primary School.

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Primary Industries and Water

  • $2 million over the next four years for the continued recruitment and training of new detector dog teams.
  • $1 million towards further biosecurity infrastructure and operating system upgrades following on from $1 million in the 2015/16 budget.
  • $2.4 million to programs aimed at enhancing the quality and sustainability of the Tasmanian seafood industry.
  • $1.15 million over the next two years for the development of the Fisheries Integrated Licensing and Management System.

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Resources

  • $2.6 million over the next two years to relocate Mineral Resources Tasmania to Burnie.
  • $1.4 million for the Mineral Resources Tasmania Geoscience Initiative program aimed at attracting new exploration investment.

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Tourism

  • $8.8 million over four years to support continued growth in Tasmania’s visitor economy.
  • $4.4 million in additional investment to drive tourist demand to the State.
  • $6.3 million upgrade to the Great Eastern Drive.
  • $650,000 for the Tasmanian brand.
  • $1.25 million for Aviation Market Development.
  • $600,000 for Business Event Tasmania.
  • $15 million on Cradle Mountain Master Plan.

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Arts

  • $700,000 over the next three years for the implementation of the Tasmanian Museum and Art Gallery’s strategic plan aimed at bringing 1.5 million visitors to the state annually.

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Energy

  • Confirmation of the establishment of an Energy Security Taskforce to be chaired by Mr Geoff Willis.
  • Up to $10 million in loan funding will be made available for low interest loans for businesses and households to invest in a range of energy efficient products.

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Environment, Parks and Heritage

  • $5.7 million on parks infrastructure to maintain and enhance visitor experiences.
  • Infrastructure to be upgraded from this year’s Budget includes:
    • Campgrounds and facilities at Fortescue Bay.
    • Amenities at Pirates Bay.
    • Replacement of the Mt Mawson day shelter.
    • Infrastructure on Bruny Island.
    • Construction of amenities at Wineglass Bay.
  • $220,000 to help Maria Island reach full tourism potential.

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Planning and Local Government

  • $400,000 allocated to continue planning reform to enable Tasmanian Planning Commission to undertake statutory functions under new Planning Scheme laws.
  • $1.9 million Allocated to iPlan, an integrated planning and building portal for builders and commercial developers.

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Police and Emergency Management

  • $10 million to continue to rebuild the police service by employing an extra 113 officers.
  • $6 million over four years in refurbishing or replacing housing for police officers stationed in remote or regional areas.
  • $2 million to upgrade major police buildings.
  • $3.4 million over two years to support the State Emergency Services.
  • $5.1 million, in addition to the $3.5 million allocated in last year’s budget, to a new offshore police patrol vessel.

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Infrastructure

  • A total of $1.8 billion in infrastructure projects including $656 million in road and bridge improvements.
  • $200 million for Midlands Highway upgrades.
  • $32 million for Brooker Highway upgrades.
  • $18 million for further improvements to the Huon Highway/Summerleas Road.
  • $12 million for the shoulder sealing project on the Esk Main Road.
  • $6.5 million for improvements to Colebrook Road between Cambridge and Richmond.
  • $6.3 million for safety and visitor experience upgrades to the Great Eastern Highway.
  • $5 million for the refurbishment of residential housing for regionally based police officers and their families.
  • $5.1 million to complete the procurement of the PV Cape Wickham police vessel.
  • $31 million over the next four years for the procurement of 100 new buses for Metro Tasmania.
  • $1 million to alleviate Greater Hobart traffic congestion.
  • $20,000 grant available for the construction of new homes under the First Home Owners Grant.
  • $40 million special dividend investment in the Vessel Replacement Fund to prepare for the replacement of the Spirit of Tasmania I and II predicted for the early 2020s.
    • Additional $40 million dividend investment in the Vessel Replacement Fund expected for 2017/18.

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Human Services

  • $260 million to more than 230 community sector organisations.
  • $572 million over the next four years to assist with the introduction of the NDIS.
  • An additional $60 million as part of the Affordable Housing Strategy and Action Plan.
  • $20.6 million to deliver a holistic across government redesigned child protection system.
  • Additional funding of $990,000 over two years to be shared across 33 Neighbourhood Houses the Government supports.
  • $1.7 million over two years toward Neighbourhood Houses infrastructure.
  • Continued Contribution of $50,000 a year over three years for women to undertake ACID courses.
  • $300,000 per annum for emergency relief under the Family Assistance Program.
  • $330,000 per annum to support Tasmanians through the Energy Hardship Fund.
  • $185,000 for ongoing assistance to Men’s Sheds.
  • $390,000 over three years towards community events and charitable appeals.
  • $125,000 for the Multicultural Grant Program.

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Corrections

  • $4.7 million over the next four years to increase accommodation by 20 beds for female inmates.
  • $693,000 funding to upgrade the electronic security system in the men’s Minimum Security Prison.
  • $300,000 per annum to the Tasmanian Prison Service to support the recent correction act changes for treatment of sex offenders in prison.
  • $575,000 to establish a Tasmanian Custodial Inspector.
  • $496,000 to the legal assistance sector.
  • $600,000 to the Office of Public Guardian for protecting the rights of people with disabilities.
  • $930,000 to improve the level of security at court.

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Veterans Affairs

  • $350,000 to support RSLs and Tasmania’s veterans.
  • $100,000 per year towards the Teddy Sheean Memorial Grants Program, providing small grants to RSL sub-branches and other ex-service organisations for minor capital works and upgrades.
  • $50,000 per year through to 2018 on projects to commemorate the Centenary of ANZAC in Tasmania through a grants program.

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Small Business

  • $400,000 over two years to grow small business in Tasmania.
  • $600,000 to contribute towards apprenticeships and traineeships in small businesses.
  • $900,000 over two years to support development of technical and work-ready skills.

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Forestry

  • $1.25 million towards a Wood and Fibre Processing Innovation Program.
  • $500,000 in matched strategic marketing funding to grow the industry and increase export opportunities.

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Aboriginal Affairs

  • $3 million over four years for relationship building with the Tasmanian Aboriginal Community.

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Sport and Recreation

  • $5.3 million investment in Sport and Recreation including:
    • $2 million over four years to support grassroots AFL communities in Tasmania.
    • $2.7 million over three years to upgrade the Silverdome.
    • $600,000 over four years of continued funding for peak sports bodies including swimming, hockey, bowl, soccer and netball.
    • Final instalments of $300,000 to Hockey Tasmania to complete the upgrade of facilities in Launceston and Hobart, and $38,000 to Physical Disability Sports Tasmania.

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2 Comments

  • Sally Chandler says:

    This is a very comprehensive summary of the Budget. Thank you!

  • Dr Peter Holm says:

    Very interesting. Certainly a controlled and responsible budget.
    However, the distribution of funds and support for projects is like butter on bread…plenty and thick in the Hobart and southern region and then rapidly thins as one heads north to turn into see through marg. in the NW the further one is from the capital! One has to seriously ask, where is the wealth in this State generated? It seems to many that the activity follows the reverse trend to the butter. As one overseas visitor once observed, Tasmania is funnel-shaped, the money and politicians all precipitate to the south but then we get left with the latter on the filter paper and the money just seems to disappear!! A short visit to the north, NE and then to the NW (Terra Amnesia) would confirm this. We welcome the pollies to come and have a serious look at the true situation in stead of basking in the southern economic sunshine and deluding themselves the entire State is in anywhere like the same position.
    PH President Burnie Chamber of Commerce and Industry

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