2004 Budget Speech



PARLIAMENT OF TASMANIA


2004-05 BUDGET SPEECH


'Investing in People'

BY

THE TREASURER

(THE HONOURABLE PAUL LENNON MHA)


Delivered in the House of Assembly on 20 May 2004 on the Second Reading of the Consolidated Fund Appropriation Bill 2004

Presented to both Houses of Parliament by the Governor's Command

Budget Documents are also available at www.treasury.tas.gov.au





MR SPEAKER

It is appropriate in this my first Budget as Premier and Treasurer that I outline my vision for Tasmania.

It's a vision based on strong leadership, responsible financial management and a compassionate government that invests in its people.

It's a Tasmania that is vibrant and alive with a dynamic economy built around our natural advantages and our great beauty.

It's a Tasmania that knows that its greatest asset is its people with an innovative island spirit and a renowned friendliness and sense of community.

It's a Tasmania where people feel valued, safe and included.

It's a Tasmania of diversity and tolerance.

It's a Tasmania where the education opportunities for young people lead the world.

It's a Tasmania where our health system is focused on delivering the best care that we can afford.

It's a Tasmania where the less well off and those in need are extended a helping hand from a compassionate government and a caring community.

It's a Tasmania that recognises that there is a balance between economic activity and our clean green environment.

It's a Tasmania where government is able to meet the needs of its community, is passionate about this State and focussed on what needs to be done.

It's a Tasmania that is a leader by example in sound financial management.

It's a Tasmania where the business community has certainty and confidence.

Mr Speaker

This Budget is framed in that context.

It builds on the successes of the past and paves the way for the future.

It's about seizing the opportunities.

It's about having a sound financial foundation.

It invests in people.

It invests in the future.

It is a Budget that keeps Tasmania headed in the right direction.

It builds on the New Tasmania.

Tasmanian Economy

Mr Speaker

The New Tasmania is underpinned by a turn around in our economic performance.

An economic performance highlighted by:

  • record levels of private investment;
  • record levels of employment;
  • record tourist arrivals;
  • two credit upgrades;
  • the lowest unemployment rate for twenty years;
  • business confidence at record or near record levels;
  • record population levels;
  • tax cuts of $75 million since 1998; and
  • the lowest taxation severity of any State outside Queensland.
In the mid 1990s, Tasmania was experiencing a worrying decline in population. But those days are gone. A remarkable turnaround has occurred. The financial, social and economic policies locked in by this Government have seen our population increase by more than 5 000 in the year ended September 2003.

The latest figures show a record 478 426 people are now living in the State.

Mr Speaker

For most of the 1990s, governments talked of major projects, but it took the election of a Labor Government to deliver:

  • to deliver on gas, Basslink and wind energy;
  • to build new tourism infrastructure like the Tahune Air Walk; and
  • to have the courage to buy three super fast ships.
These investments, amongst others, have created opportunity and confidence. In tourism alone, investments worth $400 million are underway or planned.

Mr Speaker

Not since the days of hydro industrialisation has Tasmania witnessed investment, both private and public, of this magnitude.

According to Treasury forecasts, the State's economy is expected to grow by 3.2 percent in the coming year. Closely in line with national predictions.

However, jobs growth in Tasmania is expected to be higher than for the nation with Treasury predicting an extra 5 000 jobs in 2004-05.

Treasury forecasts Tasmania's population will continue to grow strongly - up by more than 3 300 next financial year.

Budget Framework

Mr Speaker

The strong performance of the Tasmanian economy has yielded a substantial dividend to the Budget.

We see this in improved receipts across most areas but especially in payroll tax because of record employment growth and duties because of high levels of activity in the property market.

Our Government-owned businesses continued to perform well and are big contributors to Budget receipts.

Mr Speaker

It is the people of Tasmania who deserve the credit for our improved financial position. They are the ones who made the sacrifices during the 1990s to bring our debt under control.

By reducing debt, the Government has been able to re-direct over $400 million into providing better services for the Tasmanian people that would otherwise have been spent on paying interest.

This Budget allows for $129 million to be spent on key services that otherwise would have gone to pay our interest bill. The amount will rise to $150 million a year when the Net Debt is fully eliminated.

Mr Speaker

I am pleased to announce that Tasmania will achieve that target by June 2007 - a year sooner than expected.

By this time we will have eliminated $1 600 million of General Government Net Debt that we inherited in 1998. And the Hydro will still be in public hands.

By comparison this year, Tasmania will receive about $80 million more in GST revenue than we would have under the previous Commonwealth-State Financial Relations arrangements.

The Budget continues the Government's commitment to responsible financial management.

It provides for a Fiscal Surplus of $15 million and sets the groundwork for becoming Net Debt free by June 2007.

However, the Fiscal Strategy is not an end in itself. Rather, it is a means to provide better Government.

Mr Speaker

The 2004-05 Budget has been made possible by the achievements and contributions of so many people in our community.

Through participation in Tasmania Together, the industry audits, the Partnership agreements, the regional community forums, and the Budget community consultation process and in so many other ways, Tasmanians have been part of helping lay the foundations on which this Budget is based.

And Mr Speaker

Like the last six Budgets, this is a Budget that only a majority Labor Government can deliver.

The Labor Party has always been about people, about providing a helping hand to those most in need, about responsible financial management, about sustainable economic growth, and about creating a positive future.

This Budget delivers on these Labor priorities.

The strategic approach the government has taken means we can build on the Budgets and the initiatives that have gone before, whilst providing the foundations for the Budgets that are to follow.

Mr Speaker

TasCOSS has pointed out before that unemployment is the greatest social injustice.

I am pleased that under this Government, the number of Tasmanians in work is higher than ever before, but we must never lose sight of those who are out of work, or remain disadvantaged in these buoyant times.

This year, concessions and subsidies worth more than $200 million will be available to those most in need.

A new and updated Concessions booklet will be released this weekend.

Social Package

In the great traditions of Labor, the 2004-05 Budget is based on the delivery of a far-reaching social package.

It is a package in excess of $100 million designed to help the most vulnerable and needy in our community.

It especially targets those in our community with special needs.

It is a comprehensive package that includes initiatives in health, housing, education, transport and community safety.

The package delivers:

  • $45 million for the Affordable Housing Strategy;
  • $3.8 million for disability services and clients with high needs and challenging behaviours;
  • $6.9 million for mental health services;
  • $17.7 million to combat family violence;
  • $3.2 million for child protection services;
  • $8.5 million to upgrade dental services;
  • $7.8 million to help students with high needs and challenging behaviours;
  • $3.3 million for more transport subsidies for people with disabilities, and for the aged and the unemployed;
  • $2.6 million to provide indexation to the funds provided to the non-government organisations;
  • $1.5 million to break the cycle of motor vehicle theft; and
  • $1 million to extend the Partnership to Jobs program to help the long-term unemployed.

Mr Speaker

The Government recognises that the improving economy and the resultant rise in house prices has stretched the ability of some first homebuyers to purchase a home.

Accordingly, from today first homebuyers, who are eligible for the first home owners grant, will receive up to $4 000 stamp duty relief on their home purchase provided the cost of the home does not exceed $350 000. This means that a first homebuyer will pay no stamp duty if the home costs $150 000 or less.

The cost of providing this relief in 2004-05 is $8 million.

This means that direct State Government support for first homebuyers in 2004-05 will exceed $24 million.

This package will make a real difference to lives of many Tasmanians with special needs. It is part of the broader funding commitments made in this Budget.

Health and Human Services

Mr Speaker

The Government has always had a strong commitment to the health and human services needs of the community.

The 2004-05 Budget reflects this commitment by providing an extra $240 million over the next four years.

In addition to the health related matters in the social package, the funding initiatives include:

  • $1.6 million to extend cardio services at the Launceston General Hospital;
  • $16 million for better health services on the North West Coast;
  • $22 million for hospitals and health centres;
  • $5 million for the Centre of Excellence in health and bioinfomatics;
  • $7 million for hospital equipment and ambulances; and
  • more funds to meet the increased demand for health care.
Education

Mr Speaker

Investing in the education of our children is a primary responsibility of government.

The Budget provides for increased spending in excess of $130 million on education over the next four years. New education initiatives in addition to those in the social package include:

  • $7 million to reduce class sizes in Prep and Year 1;
  • $1 million to improve literacy and numeracy for Year 7 students;
  • $17 million for information and communications technology;
  • $2 million for child care;
  • $5 million for non government schools; and
  • $17 million for capital works including Springvale hostel at New Town, Port Dalrymple District High School and Latrobe High.
Police, Public Safety and Justice

Mr Speaker

Tasmania is the safest state in Australia.

Total crime reported in the past four years has fallen by more than 20 percent and crimes against the person are amongst the lowest in the nation.

However, protecting people in the community is about a lot more than just reducing crime statistics.

It's about changing people's patterns of behaviour.

It's about funding and training our police officers.

It's about adequately funding our justice system and making sure that we can respond to natural disasters, road accidents and rescue emergencies.

The 2004-05 Budget increases funding by more than $75 million for Police, Public Safety and Justice over four years.

Mr Speaker

The Government recognises the outstanding work of the State Emergency Service volunteer units. We know the general community also places a high value on the volunteers' contributions.

To enable the Service to be even better prepared for emergency situations, the Budget provides an additional $3 million for more equipment, training and staff.

Skills Training and Job Readiness

Mr Speaker

The improving economy has resulted in 24 consecutive months of job growth. The ABS reported that 212 700 people were employed in Tasmania in April.

This is the highest figure on record.

Importantly, two thirds of the new jobs are full-time.

Unemployment has fallen to its lowest level for twenty years.

Long-term unemployment has fallen by nearly 40 percent.

Many of our regional areas are also experiencing record job growth.

For example, the most recent figures show that the unemployment rate in the Huon Valley has fallen from 11 percent to 4.9 percent in the year ended December 2003. And Sorell has experienced a large drop in youth unemployment.

At the same time as these excellent job figures, the level of job vacancies continues to reach new highs.

Mr Speaker

The rapidly improving job figures have created a skills shortage in some sectors of the economy.

It is a shortage that the Government will meet head on.

Accordingly, today I announce details of a $25 million skills/training package designed to address the shortages and to make more Tasmanians job ready.

The package includes:

  • $15.3 million to increase participation in post compulsory education and training;
  • $5.3 million for TAFE to meet the growing demand for skilled employees in construction, tourism and hospitality, community services and primary industries. And to lift training participation for the long-term unemployed and to improve adult literacy;
  • $1.2 million to extend the Start@TAFE pilot to provide flexible training opportunities for early school leavers;
  • $1 million for a new Workforce Development Fund. These funds will be available on a dollar for dollar basis to help small businesses employing 50 employees or less with their specific training requirements; and
  • $1.7 million for a further six skills-related programs to be administered by the Department of Economic Development.
Industry Development and Economic Infrastructure

Mr Speaker

When Labor was elected to Office in 1998, there were no major infrastructure or industry development projects underway in the State.

It's a very different picture today.

Natural gas, Basslink and the Woolnorth wind farm form the nucleus of our $2 billion energy plan.

Basslink is the largest undersea electricity cable project ever undertaken in the world. It is on track for completion by the last quarter of 2005.

Planning approvals are currently being sought for two more wind farms at Musselroe in the North East and on the West Coast near Zeehan.

The rollout of the natural gas distribution pipe is well underway. $50 million is currently set aside in the Economic and Social Infrastructure Fund to support the project.

Tourism

Mr Speaker

The Tourism industry has reached new highs with record number of tourists and more than $400 million of new investment underway or planned.

In order to build further on the rapid expansion of the sector the Budget provides $8 million for tourism infrastructure and an additional $4 million for marketing.

The Tahune Airwalk, the Scottsdale Forest Interpretation Centre, the Mt Barrow forest trail and the soon to be opened Dismal Swamp Maze form an impressive network of forest based tourism attractions. Further projects are planned for the future.

Regional Development Assistance

The Government recognises the effectiveness of the Business Enterprise Centres in providing new business opportunities in regional areas across the State.

Accordingly, an extra $1.3 million will be spent over the next four years to build the network of Centres from 12 to 14.

This is part of an additional $9 million for industry and employment assistance allocated to the Department of Economic Development in this year's Budget.

Primary Industries and Water

Mr Speaker

Significant funds have been allocated in previous Budgets for the State's Water Development Plan. We expect work to begin soon on the Meander Dam project.

A further $1.5 million is set aside in this Budget for water development projects.

Tasmania's disease free status must be protected at all costs. With the increase in tourism as a result of the three new ships, there is a need to increase quarantine checks at Devonport. $1.2 million is provided for this purpose.

Furthermore, the Government will continue the fox eradication program for a further three years at a cost of $2.7 million.

State Road Network

The Government acknowledges that more funds are required for the State road network.

Therefore, an extra $18 million has been allocated from the Economic and Social Infrastructure Fund for additional roads and bridge maintenance. A total of $243 million will be spent on the State road network over the next four years.

The Environment

Mr Speaker

The Government values Tasmania's natural and built heritage.

To this end:

  • $5.8 million has been allocated for the activities of the natural resource management framework;
  • $4.4 million has been allocated to implement our conservation obligations under the Regional Forest Agreement;
  • a further $3 million is available to protect and conserve our Aboriginal and cultural heritage; and
  • $2 million has been allocated for conservation works at Port Arthur.
The Arts

Mr Speaker

Building communities through arts and learning is an important priority for the Government.

So that the Tasmanian Symphony Orchestra can remain one of the best small orchestras in the world, we are providing an extra $1.2 million to fully deliver the recommendations of the Major Performing Arts enquiry.

A further $1.2 million is set aside for a permanent Antarctic and Southern Oceans exhibition at the Tasmanian Museum and Art Gallery.

Ten Days on the Island has enriched Tasmania's artistic standing. An extra $400 000 is available to ensure the 2005 festival maintains its high standards.

And there's $250 000 to increase the Arts Grants Program.

The Theatre Royal will also be refurbished and upgraded at a cost of $1.6 million.

Conclusion

Mr Speaker

The 2004-05 Budget that presents a proud record of responsible financial management, strategic investment and social and economic policy objectives.

It's a Budget that confirms we've created the circumstances to allow governments, in future years, to provide more services and tax relief as the benefits from our strong economy flow through.

It is a Budget that confirms our economy is stronger than it's ever been.

It's a Budget that confirms we've put the State's finances into the best shape they've been for 100 years.

It's a Budget that invests more than $1 billion in Tasmania's social and economic future over the next four years.

It's a Budget that releases Tasmania from the grip of debt forever.

It's a Budget that extends a 'heart of gold' to people with special needs through the biggest social package in the State's history.

It's a Budget that only a stable majority Labor Government can deliver.

Mr Speaker

It's a Budget that builds on the New Tasmania and keeps Tasmania headed in the right direction.

I commend the Bill to the House.

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