Coalition Government 2012-13 Budget to drive economic growth, generate jobs, deliver major infrastructure and improve community services

The Coalition Government’s 2012-13 Budget delivers a responsible plan to drive economic growth, generate jobs, deliver major infrastructure and improve community services for Victorians.

Strong State finances

The Coalition Government’s 2012-13 Budget delivers the right economic strategy to put Victoria’s finances onto a stronger foundation for the future while managing the tight financial constraints imposed by international economic uncertainty, a weaker national economy and consequent declines in state revenue.

Due to external economic shocks, Victoria’s revenue forecasts over the next four years will be $8.3 billion lower than was forecast in late 2010. This is a bigger financial hit than that which occurred during the 2008 global financial crisis.

The previous Labor Government left Victoria a trend of unsustainable spending growth and escalating debt with no plan to address the deteriorating budget position.

Over the 10 years to 2010-11, total expenses grew at an unsustainable average rate of 7.3 per cent. In the 2012-13 Budget the government will limit expenditure growth to an average of 2.9 per cent over the forward estimates.

The Budget builds on measures announced last year to put Victoria’s finances back onto a sustainable path through further savings of $1 billion over four years. Measures taken include:

• limiting Parliamentarians’ pay increases to 2.5 per cent for the next twelve months and a freeze on their allowances;
• limiting senior public servant salary increases to 2.5 per cent;
• a further reduction of 600 public service positions; and
• additional departmental efficiencies.

The 2012-13 Budget delivers surpluses exceeding $100 million each year growing to $2.5 billion by 2015-16.

The government’s fiscal strategy will stabilise net debt to six per cent of GSP by June 2016.

Record infrastructure investment

Infrastructure investment is a vital part of the Coalition Government’s economic strategy to generate jobs, boost productivity and grow Victoria’s economy.

In challenging financial circumstances the Coalition Government is delivering a record state infrastructure investment of $5.8 billion in 2012-13.

In 2012-13 there will be $41 billion of public sector capital projects including public private partnership projects underway in Victoria.

Growing Victorian businesses and the economy

The Coalition Government will support Victorian business during challenging economic times to drive economic activity, boost productivity and generate jobs.

The Coalition Government will cut WorkCover premiums by an average of three per cent from July 1 this year.
The reduction will benefit almost 60 per cent of Victorian businesses, of which nearly 59,000 will have their premiums cut by more than 10 per cent.

Victoria already has the lowest workplace insurance premiums in Australia and this cut will strengthen Victoria’s competitiveness to attract business investment, reduce costs for business and support economic growth.

As part of the Coalition Government’s manufacturing blueprint A More Competitive Manufacturing Industry, the 2012-13 Budget delivers $58 million to boost productivity and assist Victorian manufacturing businesses to compete in the global economy.

The 2012-13 Budget delivers new funding for the Coalition Government’s Agricultural and Food Industry Program to support Victoria’s producers to increase production, product development and sales of our world renowned high quality produce.

The 2012-13 Budget also provides funding for Victoria’s first comprehensive International Engagement Strategy that will support Victorian businesses to engage with overseas markets, increase export sales and increase investment.

The Coalition Government will invest a further $1 billion over four years to support future economic growth with a better educated and skilled workforce, to increase productivity and workforce participation.

Quality community services and facilities for communities

The Coalition Government is prioritising funding to deliver high quality health, education, safety and community services.

The 2012-13 Budget reflects the Government’s commitment to protecting the most vulnerable in our community.

It provides $13.7 billion to Victoria’s hospitals and health system in 2012-13. $1.2 billion is provided over four years in additional funding for health and aged care services. Funding has also been provided for major hospital upgrades in metropolitan and regional Victoria.

A $200 million school capital program will fund new schools and important facility upgrades.

The 2012-13 Budget also delivers $1.4 billion in new funding for early childhood development, education and training and $336 million to better protect Victoria’s most vulnerable children.

Growing rural and regional Victoria

The Coalition Government is committed to investing in and growing regional and rural Victoria to create new prosperity, more opportunities and a better quality of life.

The regions account for a quarter of the State’s economic output, or around $71 billion a year.

The high Australian dollar has impacted on Victoria’s exports, including primary production and manufacturing which have a significant presence in regional and rural Victoria.

The 2012-13 Budget builds on the significant investment made by the Government over the past year and delivers on important new infrastructure projects, including $42.2 million for the Western Highway, $35.5 million for the Ballarat Western Link Road and additional regional rolling stock.