There was more pain than gain in this budget for Victorians – a fact Premier Denis Napthine will be acutely aware of heading to November’s state election.
Joe Hockey described us as a ”nation of lifters, not leaners”. Those waiting for a train, visiting a doctor, or finding themselves unemployed will have little to lean on in Victoria.
This was never going to be a great budget for us – we share the pain more evenly than we share the cash from Canberra.
Victoria carries a heavy load with GST, paying more than it gets back. This burden is not reflected in the state’s share of infrastructure spending.
NSW and Queensland had almost twice as much committed for infrastructure investment – western Sydney had its own infrastructure plan with expenditure in the forward estimates of $1.2 billion.
The cuts are heavy in this budget; money will missed from everywhere – local government, health, education.
”Our economic action strategy is not about cutting government spending; it is about spending less on consumption and more on investment so we can keep making decent, compassionate choices in the future,” the Treasurer said.
Some of those compassionate choices are likely to occur in a federal budget closer to the next election.
This was a tough budget, and some of the most vulnerable in society will be hit hardest.
Mr Hockey said ”the age of entitlement is over. It has to be replaced, not with an age of austerity, but with an age of opportunity.”
Those under 30 will have to wait six months before getting unemployment benefits. Does this take away the opportunity for people to eat and have a roof over their heads?
And what will it mean allowing universities to set their own tuition fees? The Treasurer said ”some course fees may rise and some may fall”. Few will fall.
The Abbott government has lived up to its commitment to be a roads government, with billions of dollars for road projects around the country.
What is not clear is the impact of federal funding on projects such as the $14 billion to $18 billion East West Link or the $11 billion WestConnex motorway project in Sydney.
There is little doubt federal cash makes the projects more attractive to investors and speeds up construction – but would roads such as the tolled East West Link have been built anyway given the federal government is providing only about 20 per cent of the expected cost?
Can the same be said for major rail projects that have been snubbed?
There is no money for the Napthine government’s $8.5 billion to $11 billion Melbourne Rail Link from Melbourne Airport to Southern Cross, South Melbourne, Domain and South Yarra.
The state government has committed just $40 million to this project before the election and $830 million in the following years. Can the public have confidence the project will proceed when tens of millions of dollars were spent on planning the now abandoned Metro rail tunnel project?
The last major rail project to get off the ground in Victoria was the Regional Rail Project. It received billions of dollars in federal funding and enjoyed bipartisan support.
It is hard to see where the other $10 billion for the Melbourne Rail Link will come from.
Infrastructure Australia considered the Melbourne Metro rail tunnel beneath Melbourne’s CBD a ”shovel-ready project”.
This time last year the Gillard government was committing $3 billion for the tunnel.
Much changes in a year. Gillard is gone, the money is gone, the project is gone and now the budget papers reveal the Infrastructure Australia Council will be gone, replaced by a new Infrastructure Australia Board.
The budget infrastructure report quoted the Productivity Commission’s draft report on public infrastructure that identified poor project selection and inadequate planning as major constraints on building infrastructure in Australia.
Without a full business case for the East West Link released, it is hard to see how this issue has been tackled by the federal budget.
The one bright light on a grim day was news of a $20 billion medical research future fund. Melbourne must be in the box seat to get a big slice of that funding given its world class medical researchers.
But the good news was swamped by the bad.
Buried deep in the budget papers there was a $215 million saving by ”not proceeding with funding for the General Motors Holden next generation vehicles project following Holden’s decision not to proceed with the project and to cease vehicle manufacturing in Australia by the end of 2017”.
The Cuban cigars will not be burning in Spring Street tonight.
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