THE Hunter Valley has been virtually ignored in a tight federal budget with one of the thinnest capital works programs in living memory.
VIDEO: Company tax cut, defence cuts and cash spent on "battlers", online political editor Tim Lester looks at the nation's post-budget media coverage.
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A lack of mineral resources rent tax funding for regional infrastructure projects, combined with a need to turn a $44.5billion deficit into a $1.5billion hoped-for surplus left the Gillard government with little to spend on projects for a sullen electorate.
Although the government delivered continued funding for a handful of the region’s major infrastructure projects - primarily the Hunter Expressway, the Bulahdelah bypass and coal rail construction - there was no mention of the Glendale interchange or the University of Newcastle’s inner-city campus.
The Department of Infrastructure and Transport is promising $20million over four years to pay for high speed rail planning but even this amount is also supposed to pay for other ‘‘national transport planning’’.
The government has reneged on a promise to use mineral resources rent tax proceeds to cut company tax, saying it was unable to get the necessary legislation through Parliament.
Leaving the company tax rates where they are will save the government $316million in 2012-13 and about $4.8billion by 2015-16.
Instead of cutting company taxes, Treasurer Wayne Swan is promising to give an equivalent amount to families through a
The social security and welfare portfolio has the biggest projected growth over the coming four years, with an extra $7billion, followed by
Despite the increases in social security spending, the budget fine print reveals a list of revenue raising and expense cuts that will hit Hunter residents in various ways.
Examples include increases in federal court fees, a means test for medical expenses personal income tax offsets and the shelving of a promised ‘‘standard deduction’’ for work-related expenses that will save the government $400million from 2014-15 and $1.2billion the following year.
Changes to fringe benefits tax living away from home allowances and benefits will raise $50million this year and $800million over four years but the government says the changes will not affect increasing numbers of fly-in fly-out mine workers.
Older Hunter workers with small superannuation balances have been hit, with the government deferring changes to contribution caps, saving it about $1.5billion over four years.
From next year, returning international travellers will only be able to bring in 50 cigarettes duty free, raising about $600million over four years.
As announced last week, the budget has confirmed major cuts to Defence spending, with the department set to hand back $5.4billion in allocated but unspent funding between 2012-13 and 2015-16.
Part of this saving will affect operations at
The coal industry’s infrastructure funding also continued, with the Australian Rail Track Corporation able to continue its capital works programs along the coal chain, at least partly financed by a $2.37billion ‘‘capital injection’’ given to the organisation to spend over six years from 2008-09.
The importance of coal and iron ore is highlighted in the budget papers, which show that mining’s share of gross Australian profits has risen from 16per cent in 2002-03 to 29per cent this financial year.
But while mining had accounted for about 30per cent of profits it only paid 15per cent of company tax, a situation the resources rent tax was designed to at least partly remedy.
Unfortunately, however, the resources rent tax will not collect anywhere near what Labor had hoped for initially, with Treasury estimating a net return of $3billion in 2012-13, $3.5billion in 2013-14 and $3.7billion in 2014-15.
These figures include corresponding cuts to company tax, through deductions, and interactions with other taxes.
The budget papers show a substantial increase in net government debt, from $84billion in 2010-11 to $143billion this year and $144billion next year.