The Federal Government’s harsh federal budget will be offset by a new $10 billion infrastructure plan, including extra money for Melbourne’s East West link.
As part of next week’s federal budget, the Government is expected to announce a one per cent debt tax on people with taxable incomes of more than $150,000, affecting seven per cent of taxpayers and raising about $700 million a year.
Deputy Prime Minister Warren Truss told Fairfax the infrastructure growth package would be a “very substantial infrastructure budget – in fact the biggest our nation has ever seen”.
“It will not only commit a lot of federal funding to major projects, but lever funding from other tiers of government and the private sector to make a real difference to our nation,’’ he said.
“East West is a really big project and WestConnex is a really big project, you’re talking $12 to $14 billion … the government’s contribution will encourage the private sector and super funds to be involved.”
Fairfax reports the spending will include an extra $5 billion on a range of major projects including Melbourne’s East West link, which will receive funding on top of the $3 billion already committed for stages one and two.
It reports South Australia’s South Road project and a second range crossing in Toowoomba will also receive a funding boost in the package.
ABC also reports the Federal Government will announce a $2 billion concessional loan to fast track the construction of the West Connex project in Sydney which will link the city’s west with the airport and CBD.
The extra funding will see the first and second stages of the project started at the same time, expected to be next year.
Fuel excise rise loom
Millions of motorists could soon be paying more for petrol if the federal government decides to increase the fuel excise in next week’s budget.
The Abbott government is considering lifting the 38.1 cent per litre excise by three cents, which could bring in $1 billion in revenue a year, News Corp Australia reported on Thursday.
The excise has been locked at 38.1 cents since the Howard coalition government froze automatic indexation in 2001.
Both sides to blame
Chris Richardson from Deloitte Access Economists, says both sides of politics are to blame for the budget deficit.
He forecast a deficit of $27.4 billion for 2014-15.
“To actually solve an ongoing budget problem, you need 10 deficit levies. That’s why this Government is reaching for things like taxes because the problem is really big,” Mr Richardson said.
“Both sides of politics took that temporary budget boom and made permanent promises – family benefits, baby bonuses, pension increases, eight tax cuts in a row – that’s what we currently have to face.”
– with AAP