Baillieu warns of tough Victorian budget

Premier Ted Baillieu has warned Victorians they can’t have it all ahead of expected budget pain on Tuesday.

Although he boasted Victoria was in better position than other jurisdictions to deal with budget shocks such as lower-than-expected revenue from stamp duty and GST, the premier indicated the state was in store for an ugly budget.

“It will be a tough budget in challenging economic times,” he told the Liberal state council meeting in Melbourne on Sunday.

“There is no magic pudding. We can’t have it all and some things do have to change and nor is it an overnight wonder.”

Before winning power in November 2010, the coalition promised to deliver minimum $100 million surpluses.

Mr Baillieu said Victoria and Western Australia were the only jurisdictions to have aggregate surpluses over the forward estimates as of last December.

“We intend to maintain Victoria as a leading state because that is a solid basis,” he said.

Key to maintaining the state’s competitive edge would be a new international engagement strategy to be announced in Tuesday’s budget.

AAP understands the strategy will focus on building Victoria’s standing in Asia and the Middle Eastern markets in industries such as agriculture, information and communications technology, and food.

“We are going to have a much greater focus on investment attraction,” Mr Baillieu said.

Victoria would also work with NSW and Queensland to drive productivity reforms, regardless of the work of the Council of Australian Governments (COAG), he said.

Opposition Leader Daniel Andrews mocked the premier’s description of Victoria as a leading state.

“I don’t know about magic pudding but there is no magic in this state at the moment,” he told reporters.

“According to Ted Baillieu, everything’s tickety-boo in this state, we are, quote, leading the way – leading the way, yeah, with Tasmania, the only place in Australia with a higher unemployment rate.”

Roads Minister Terry Mulder said the budget would include almost $900 million of road projects, including replacing level crossings in Mitcham and Springvale with overpasses.

A Koo Wee Rup bypass will also be built connecting the Healesville-Koo Wee Rup Road and the South Gippsland Highway, as well the Ballarat Western Link Road joining the Western Freeway with the Midland Highway.

Annual maintenance funding for the West Gate Bridge will almost triple from $8 million a year to $22 million.

“The bridge is doing a lot more work than it had in the past and we need to make sure we keep it a very, very sound structure until we can get a second crossing in place for Melbourne,” Mr Mulder said.

“There will be thousands of construction jobs created out of these projects.”

There would be further road announcements in the budget, he said.

Two of the state’s busiest hospitals will also receive a boost, with a $40 million upgrade of the Frankston Hospital emergency department and $15 million for an intensive care unit at Sunshine Hospital.

A further $223 million will be spent on upgrades to country hospitals.

Mr Andrews said he expected savage cuts to pay for the road and hospital projects, including further public sector job cuts in addition to the 3600 announced in December.

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