Australia — More than $8 billion will be spent this year by on major projects in Victoria from a state budget meant to sustain 35,000 jobs through the continuing global economic slump.
Treasurer John Lenders said the budget was focused on making Victoria “recovery ready” by bringing forward spending on major projects, including the first stages of the state’s 12-year transport plan.
– $8 billion for major projects – $2.6 billion in hospital and health services – $1.7 billion for state’s education system – $1 billion for state’s response to Black Saturday bushfires
However, new forecasts in the budget project unemployment in Victoria will jump from 5 per cent this year to 7 per cent next year. By 2011, unemployment is now expected to rise to 7.75 per cent and remain there until 2013.
“This budget is one of the most important in Victoria’s recent history,” Mr Lenders said.
“The global financial crisis and the worldwide recession mean that this budget is being delivered in some of the most difficult economic conditions in many, many years.”
The state economy is forecast to grow just 0.5 per cent this year, and to slow even further to 0.25 percent next year. However, Mr Lenders denied the state was in recession.
“Victoria may not have caused this downturn and we may not be at its epicentre, but the shockwave has well and truly reached us.”
There were no changes announced to the state’s tax structure.
Mr Lenders said the state would deliver a $165 million budget surplus over the year to June 30, 2010 – nearly $700 million less than estimated for this year in last year’s budget papers and almost a tenfold decrease on the $1.5 billion surplus delivered in 2008.
Mr Lenders said the combination of the global financial crisis and the devestation wrought on Black Saturday made this a particularly difficult budget to frame.
Nearly $1 billion is set aside to pay for the state’s response to the Black Saturday bushfires, including $344 million for the cost of putting out the fires, more than $100 million for counselling and other services for families affected by the fires and an additional $61 million for businesses.
However, he said the relative strength of China and New Zealand – Victoria’s two largest export markets — would help the state recover early from the crisis.
The budget also includes:
– an additional $3.5 billion in spending on major projects by government authorities, including water authorities.
– $1.7 billion in the state’s education system, including $402 million to rebuild, extend and renovate schools across the state. Joined with an additional $800 million from the Federal Government, the investment is touted as the largest in the state’s history.
– $2.6 billion in hospital and health services, estimated to provide an additional 100 acute beds and treat 39,500 patients.