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State Budget Briefing & Analysis Grant Hehir Secretary, Department of Treasury and Finance Vince FitzGerald Chairman, the Allen Consulting Group.

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Presentation on theme: "State Budget Briefing & Analysis Grant Hehir Secretary, Department of Treasury and Finance Vince FitzGerald Chairman, the Allen Consulting Group."— Presentation transcript:

1 State Budget Briefing & Analysis Grant Hehir Secretary, Department of Treasury and Finance Vince FitzGerald Chairman, the Allen Consulting Group

2 Victorian Budget IPAA presentation Grant Hehir Secretary, Department of Treasury & Finance

3 Victorian Budget Victorian economy Budget financial results Budget initiatives

4 Victorian economy

5 Most severe global recession since 1930s Source: OECD Industrial production in the G7 during recessions

6 GFC impact more severe overseas Sources: Sources: ABS; US BLS; Eurostat, ONS, Economist Unemployment rate

7 Annual employment growth Source: ABS per cent

8 Victoria created jobs in last 12 months Source: Australian Bureau of Statistics

9 Victorian and Euro Zone business confidence Sources: National Australia Bank; European Commission optimistic pessimistic Points of std devNet balance

10 Victorian dwelling approvals increasing Source: Australian Bureau of Statistics 000’s

11 Annual population growth per cent Source: ABS

12 Victorian economic projections ActualForecast Real GSP (1.50)(2.50) Employment (0.25)(1.25) Unemployment rate (6.50)(6.75) Wage price index Consumer price index (2.00) Population (1.90)(1.80)(1.70)(1.60) Budget projections (projections in parentheses are from Budget Update where different)

13 Risks

14 Sustained pressure on AUD Source: Reserve Bank of Australia

15 Annual inflation rates Source: ABS per cent

16 Economic reform strategy In light of these risks there is an economic reform agenda in place: –prudent financial management –reducing business costs –improving competitiveness and productivity education and skills health market design

17 Budget financial results

18 financial objectives and strategies Source: Department of Treasury and Finance ObjectiveShort term targetLong term target Net result from transactions (operating surplus) At least $100 million in each year.Maintain a substantial net result from transactions (operating surplus) that allows for the delivery of the Government’s infrastructure objectives. Net financial liabilitiesMaintain a AAA credit rating.Maintain government net financial liabilities at prudent levels. InfrastructureImplement strategic infrastructure projects. Deliver world class infrastructure to maximise economic, social and environmental benefits. TaxationImplement reforms.Provide a fair and efficient tax system that is competitive with other states. Service deliveryImplement the 2006 election commitments. Provide improved service delivery to all Victorians.

19 Maintaining a substantial operating surplus Net result from transactions $ million Source: Department of Treasury and Finance Short term $100 m target

20 Maintaining a substantial operating surplus Source: Department of Treasury and Finance per cent Revenue and expense growth relative to nominal GSP

21 Maintaining a substantial operating surplus - Discretionary revenue not fully recovered Discretionary Revenue (GST + State Taxation) Source: Department of Treasury and Finance

22 Maintaining prudent financial liabilities - Net debt reduced since 2009 per cent Source: Department of Treasury and Finance General government net debt/gross state product

23 Maintaining prudent financial liabilities Source: Department of Treasury and Finance per cent General government sector net financial liabilities

24 Deliver world class infrastructure $ billion Source: Department of Treasury and Finance Infrastructure spending

25 Deliver world class infrastructure $ billion Source: Department of Treasury and Finance Sources of funding for net investment

26 Improving business competitiveness Payroll tax cut –Saving to business of $193 million –Seven cuts in 10 years Workcover premiums cut –Saving to business of $240 million –Six cuts in last 7 years Land tax cuts –Exemption of up to two years for construction of residential aged care facilities and retirement villages Red tape reductions –Government has doubled target and now plans to cut regulatory burden by $500 million per annum by 2012

27 Payroll tax rate cut to 4.90 per cent per cent Payroll tax rate Source: Department of Treasury and Finance

28 WorkCover premiums cut by 3.5 per cent per cent Source: WorkCover Authorities ‘000

29 Tax competitiveness Source: Australian Bureau of Statistics, Department of Treasury and Finance and various state publications Victoria New South Wales Queensland per cent Taxation as a share of nominal GSP

30 Budget initiatives - provide improved service delivery to all Victorians

31 Budget output initiatives Net impact of Budget new output initiatives Source: Department of Treasury and Finance

32 Budget asset initiatives Budget new asset funding Source: Department of Treasury and Finance

33 Investing in education Victorian Schools Plan – First tranche exceeded –553 school upgrades/refurbishments funded this term –Exceeded promise to fund 500 this term Blueprint for education and early childhood development –42 actions towards system improvement, partnerships with parents and communities and workforce reform $287 million to support non-government schools –Support for disadvantaged students and students with disabilities Building the Education Revolution –Delivering $2.6 billion of capital works in partnership with Commonwealth Government

34 Investing in lifelong learning Early childhood development –3,590 extra kindergarten places and 126 kindergarten teachers –Partnership with the Commonwealth Government to deliver National Quality Agenda for Early Childhood Education and Care –Establishing the Victorian Deaf Education Institute –Major upgrades to Glenroy Specialist School, Northern School for Autism and Eastern Autistic School Support for TAFE sector –New infrastructure including new Teaching & Learning Centre for NMIT –Apprenticeship completion bonus and accommodation allowance

35 Putting patients first $4 billion injection for Victoria’s health system in partnership with the Commonwealth, including; 1,000 new health workers $2.3 billion for Victorian health care facilities since Budget –$618 million for regional hospitals in Bendigo, Coleraine, Leongatha, Ballarat, Geelong, Wonthaggi and Healesville –$408 million for Box Hill Hospital –$91 million to expand Sunshine Hospital $760 million for immediate service funding –22,000 additional inpatient services in –9,000 elective surgery treatments over two years –32,000 additional outpatient appointments in Expanding support for people experiencing mental illness –New Mental Health Bill –Boosting early intervention programs for young people including youth suicide prevention and youth and mental health outreach teams

36 Putting patients first $935 million from COAG Agreement on health and hospitals reform –150,000 more emergency departmental patients each year being treated –34,000 more patients receiving elective surgery faster –additional 332 sub-acute beds enabling treatment of 5,000 patients annually Making Victoria a leader in Cancer research and treatment –Parkville Comprehensive Cancer Centre –Olivia Newton-John Cancer and Wellness Centre - Stage 2a –Ballarat Regional Integrated Cancer Centre

37 A Fairer Victoria – strengthening the safety net Helping households with rising living costs –Increasing the water concession for 669,000 households –Continuation of the Waterwise program for water audits & retrofitting Looking after vulnerable children –Addressing out of home care service growth and enhancing quality services for traumatised children ($35 million) –Family services to better assist children at risk ($24 million) Ongoing support for people with a disability –Increase in funding for Community Service Organisations –Better resourcing 24-hour shared support accommodation ($35 million plus $11 million in asset funding) –Supporting people with autism and their families ($7.5 million)

38 Retargeting the First Home Bonus 69% of Victorians own their home First Home Bonus created jobs last year (HIA) FHB takes pressure off the rental market First Home Bonus refocused to newly constructed homes Boost for housing and employment in CADs ($10 million) Support for community infrastructure ($22 million) NRAS - $237 million for up to affordable dwellings

39 Delivering the Victorian Transport Plan 50 new low floor trams and supporting infrastructure to move an extra 10,000 passengers at a time 20 premium station upgrades including 100 additional station staff Four new train stations in growth corridors –Cardinia Road, Williams Landing, Lynbrook and Caroline Springs Transport connections program to assist regional and rural communities

40 Working with the community to tackle the causes of crime Delivering the Respect agenda –Funding A Right to Respect tackling sexual and domestic violence against women ($14 million) –Fifty five additional youth workers to support young people ($22 million) –Launched the Knives Scar Lives campaign Swifter access to justice –Managing court demand and legal services master plan ($64 million) –Boost to Victoria Legal Aid ($50 million)

41 Promoting community safety Delivering 1,966 frontline police back on the streets –Biggest one-off boost in Victoria’s recent history Building an effective corrections system –Increased capacity for women’s prison accommodation ($81 million) –Additional men’s prison accommodation ($46 million) –Continuation of Better Pathways strategy to reduce women’s imprisonment and re-offending

42 Bushfire reconstruction and preparedness Budget: Immediate Response ($986 million) –33 Community Recovery Centres –Over 200 case managers appointed –Clearing over 3,000 damaged properties Interim Report response announced in ($61 million) –Improvements to bushfire information services New funding in Budget ($254 million) –Preparedness and community education ($92 million) –Emergency response initiatives ($79 million) –Extra support for Victorian Bushfire Reconstruction and Recovery Authority

43 Our environment – continuing Victoria’s Leadership Leadership in tackling climate change –Support for ETS –Climate Change White Paper to be delivered this year –Climate Change Bill –Land & Biodiversity package released in December 2009 Jobs for the Future Economy statement ($175 million) –Improve the energy and water efficiency of the State’s hospitals, schools and government buildings –New research and industry partnerships in sustainable industries Free entry to national parks –Estimated to boost visitation by 25-50% a year

44 Victorian Budget IPAA presentation Grant Hehir Secretary, Department of Treasury & Finance

45 State Budget Briefing & Analysis Grant Hehir Secretary, Department of Treasury and Finance Vince FitzGerald Chairman, the Allen Consulting Group


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