Victoria, Australias second-most populous state, will spend A$11.5 billion ($8.5 billion) on infrastructure such as roads and rail lines to support 35,000 jobs, TreasurerJohn Lenders said.
Thebudget surplus for the fiscal year starting July 1 is forecast to be A$165 million and the states economy will grow 0.25 percent, Lenders said in Melbourne today as he announced the governments spending plans. The state may sell as much as A$7.5 billion of bonds to fund its programs.
It is crucial for governments to lift their infrastructure investment to drive jobs now and build for the future, Lenders said. Our government is investing to secure jobs now and to position Victoria to capitalize on the worldwide recovery.
The projected surplus for the current fiscal year, which ends on June 30, has been slashed 80 percent to A$163 million after a 5 percent drop in government revenue. Employment in fiscal 2010 is forecast to fall 1 percent, increasing the states jobless rate to 7 percent.
The states bonds fell, pushing up yields on 5.75 percent securities maturing in 2014 by 0.16 percentage point to 5.555 percent, the largest increase since Feb. 6.
The government expects an average surplus between 2010 and 2013 of A$349 million as it seeks to maintain its AAA credit rating from Standard & Poors.
The state will spend A$402 million on renovating schools, A$245 million on hospitals and A$205 million on new suburban rail tracks.
Lenders also allocated A$986 million for rebuilding efforts after bushfires in February killed 173 people and destroyed more than 2,000 homes.
Melbourne, the capital of Victoria, is home to BHP Billiton Ltd., the worlds biggest mining company, Fosters Group Ltd., Australias biggest liquor maker, and Telstra Corp., Australias largest phone company.