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Federal and State budgets deliver for Victoria

Submitted on Thursday, 10th May 2018

May is budget season with the Victorian and Federal budgets handed down. Both will benefit Victorian business.

Road and rail infrastructure featured strongly in both budgets. Combined, almost $50 billion will go towards a number of Victorian Chamber priorities and other infrastructure projects, including the Airport Rail link and the North East Link.

Infrastructure highlights include:

  • $5 billion for a Melbourne Airport rail link
  • $1.75 billion for the North-East link plus $110 million from the State to fast track the completion of design and planning
  • $941 million for regional road upgrades and $140 million for urban congestion reduction projects
  • $475 million for a rail connection to the Monash employment precinct and $712 million for the second stage of the Monash Freeway upgrade
  • $225 million for Frankston to Baxter line electrification
  • $132 million for the Princes Highway duplication from Traralgon to Sale
  • $100 million in Federal and State funds for detailed planning of a fast train to Geelong integrated with an Airport Rail Link and the duplication of the Geelong Rail Line between South Geelong and Waurn Ponds.
  • $50 million for community infrastructure in fast growing interface council areas

Tourism will also see a boost with $20 million funding for the expansion of Avalon Airport and $153.2 million for a Geelong City Deal that includes a new convention centre and Stage 2 of the Shipwreck Coast Masterplan.

Regional and small business will benefit from cuts to the payroll tax threshold for regional Victorian businesses (now the lowest in the country) and an extension of the $20,000 instant asset write-off for a further 12 months.

All businesses will benefit from the Federal recommitment to cutting the company tax rate to 25 per cent over a ten-year period while personal income tax cuts for lower income earners will address cost of living pressures and inject additional spending into the economy.

The Victorian Budget also included an extensive skills package, including stronger secondary school pathways to apprenticeships and traineeships and better career advice to ensure more skilled workers are job ready.

However, Federal changes to the R&D Tax Incentive will make it more complicated and less attractive to undertake R&D in Australia, slowing business innovation and investment in Victoria.

Both budgets forecast a robust outlook for the Victorian and national economies, with strong and stable economic growth over the next four years, declining unemployment and strengthening wages growth.

Read the Victorian Chamber’s detailed commentary and analysis on both the Federal and State budgets.

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