Queenslanders would already be familiar with the buzz words from Joe Hockey’s first budget - the need for everyone to “contribute”, for government to be “redefined” and made “smaller”, a time to “build” and “transform” and “repair”, an end to “the age of entitlement”.
Now the rest of Australia is catching up.
In a budget speech which defined sacrifice without ever mentioning it, Mr Hockey didn’t have a lot of new things to offer Queensland.
Health and education funding
Previously announced health and education funding won’t be altered, but future funding will move to a less generous arrangement, as part of a plan to move to a future funding arrangement based on CPI and population growth.
Nationally, the government predicts it will spend $15 billion less on hospitals by 2024/25, than it would if it maintained the current funding arrangements, which are based on funding a proportion of efficiency growth. It predicts the new funding arrangement will save it just over $5 billion in national schools funding.
Education funding, set at just over $3 billion in the next financial year, will move to a “sensible indexation arrangement” from 2018, when the state is predicted to receive just over $4 billion. That is likely to mean a lower rate of funding that the state could previously have hoped to receive. The states will begin negotiating that forward funding in the next couple of years.
It’s an initiative designed to make the states “more accountable for spending and delivering of services by reducing the growth in public hospital and education funding and reducing some Commonwealth payments”.
Future education and health funding will increase, but the amount that it will increase by, is likely to be cut. The government explains it as placing funding increases on a “more sustainable footing”.
By how much is something the Queensland budget will answer next month, but when the former Labor federal government moved to cut future funding increases, the state government blamed it for forcing more cuts on Queensland.
The Commonwealth will also cease paying for “ineffective or duplicative Commonwealth payments to the states”, including the National Partnerships Agreement for Preventative Health, Improving Public Hospital Services and some concessions for pensioners and Seniors Card holders”.
The budget confirmed the federal public service will be slashed by 16,500 across the four years to 2016/17 which it said included the “previously hidden 14,500 reduction as a result of decisions taken by the previous government”.
The Australian Tax Office, which employs 4160 people in Queensland, will, as expected, bear the brunt of the cuts. The government has also scrapped the Brisbane Cross River Rail and Melbourne Metro Projects Advisory Board.
Not even the G20 was safe from the government’s red pen – it plans on slashing $7 million from the budget of the Group of 20 meeting in Brisbane this November, by “aligning the funding provided to the department of Prime Minister and Cabinet for the hosting of meetings related to the [G20] with two scheduled preparatory ministerial meetings”. The Defence Force is expected to spend $8 million providing security support for the summit.
Great Barrier Reef
The Great Barrier Reef Marine Park Authority, will have its funding reduced by $2.8 million over the next four years, leaving it with $108 million over the same time period to manage the world heritage listed icon.
But the government has committed to a ‘Reef 2050’ plan, which will include establishing a $40 million reef trust, which will be developed jointly with the Queensland government. The aim of the trust is to “provide a long-term strategic approach to address key threats” to the reef, by supporting projects which improve water quality and cull crown-of-thorns starfish. It will also allow contributions from external donors, including private and philanthropic contributions and “funds from offsets” from environmental approval processes.
In terms of infrastructure, there were no big surprises from the “record” $13.4 billion funding, although the government said Queensland accounted for “one of the largest shares of the Government’s $50 billion infrastructure plan”. Western Sydney was another big winner.
The government will pay up to $1.285 billion for the Toowoomba second range crossing , committing to funding 80 per cent of public construction of the project “following private sector engagement”, with the road expected to be tolled. Those funds are set to come from the $3.7 billion Infrastructure Investment program.
The Bruce Highway projects – up to 45 of them – will receive an additional $1 billion above the $5.7 billion which had previously been promised – taking the funding of those projects, which include the Mackay Ring Road, Cooroy to Curra section C upgrade, the Caloundra Road to Sunshine Motorway stage one funding and the second stage of the Cairns Southern Access Corridor, through to 2022-23.
Funding for the $279 Ipswich Motorway Darra to Rocklea upgrade remains unchanged, while the Moreton Bay Rail link, which had been promised $742 million under the previous government, can expect $518 million.
Funding for the Legacy Way tunnel has also dropped from $500 million under previous commitments to $400 million.
Just over $910 million had already been announced for the Gateway North upgrade, which included $125 million for an additional northbound lane, $70 million for an on-ramp and $718 million for an overall upgrade. The government didn’t improve on that by much, instead promising up to $1 billion for the projects.
The Warrego Highway upgrade will receive $508 million, just a few million short of what the previous government had promised.
“Managed Motorways” operations will be installed on the Bruce Highway between the Gateway and the D’Aguliar Highway “to improve capacity, reliability and safety” at a cost of $17.4 million.
Black Spot projects will receive $565 million funding and 2.5 billion had been set aside for the ‘Roads to Recovery’ road maintenance program.
The Inland (freight) Railway from Melbourne to Brisbane remains on the agenda, which is set to be delivered over the next decade, but there was no increase on the $300 million which had previously been announced for pre-construction works.
The federal Health, Attorney-General and Immigration and Border Patrol budgets will contribute $2.5 million over two years from 2014/15 for “operational support” for the 2018 Gold Coast Commonwealth games, with Health and Treasury kicking in $156 million as the federal contribution towards its permanent infrastructure.
Health Minister Lawrence Springborg, who last year was worried about northern Australia’s water border protection, might be pleased to learn the government is committed to spending $9.8 million on its ‘Strategic Border Command’, which will include buying three new vessels for Torres Strait patrols, to support Papua New Guinea operations.
Queensland remains a recipient state in terms of GST allocation, with its per capita allocation set at almost 1.8 per cent for the coming financial year, making its share of the GST allocation pool just over $11.7 billion, up from $10.8 billion in the 2013/14 financial year.
But with the tax reform and federation reform White Papers due by the end of next year, the government is flagging further changes. In good news for Premier Campbell Newman, who has been a champion of state’s sovereign rights at COAG meetings, the government plans on considering “the spending and taxation roles and responsibilities of the different levels of government in Australia to ensure that, as far as possible, the states are sovereign in their own sphere.
North Queensland insurance plan
But the Premier did have a win with his plan to help lower insurance costs in the natural disaster prone north Queensland region, with the Commonwealth committing to establishing an “insurance comparison rate” website and providing up to $12.5 billion over three years to help body corporate undertake engineering assessments “to identify risks that can be mitigated”.
Making a contribution
Taking a leaf out of Queensland Treasurer Tim Nicholl’s book, the budget overview reduced the “without action” predicted debt of $667 billion by 2023-24 to $23,000 for “every person in Australia”.
And as in Queensland, the “fixing of the budget” was critical to leaving the next generation “a legacy ... of opportunity”, not debt.
“As Australians, we must not leave our children worse off,” he said.
“That’s not fair. That is not our way. We are a nation of lifters, not leaners.
“... We are a great nation. We are a great people.
“By everyone making a contribution now, we will build, together, a better Australia.”