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What the budget means for motorists

Lighten the load: Australia’s road network received a boost from this year’s federal budget.

Roads spending, tax revenue form cornerstones of government’s balance sheet

15 May 2013

AUSTRALIA’S automotive lobby has lauded the more than $13 billion for road infrastructure projects announced in yesterday’s federal budget as a win for motorists.

The Australian Automobile Association said the budget, handed down by federal treasurer Wayne Swan last night, would make “an important contribution to addressing worsening congestion and improve road safety.” "The support in this budget for crucial transport infrastructure projects is well-targeted and will deliver long-term benefits for Australia," AAA executive director Andrew McKellar said in a statement.

"The commitment to key transport projects is essential if we are to address worsening congestion in our major cities and to improve safety and productivity on our national highways," he said.

Queensland is the biggest winner out of the budget, with projects worth more than $5.5 billion earmarked over the next decade.

This includes $4.1 billion to fix up northern Queensland’s notorious Bruce Highway over the next 10 years, $718 million for the Gateway North Motorway east of Brisbane to reduce congestion and increase safety, and $715 for the Brisbane Inner Rail Solution, which aims to increase capacity across the city’s railway network.

Victoria fares the next best with more than $3.5 billion committed. Projects to be earmarked with funding include $3 billion for the Melbourne Metro project that will build a nine-kilometre rail tunnel under Melbourne – but no road link – and $525 million for the $2.25 billion metropolitan ring road project scheduled to be completed within five years.

In New South Wales, the federal government has committed to $2.2 billion in funding. Of that, $1.8 billion is earmarked to help build the new 33-kilometre WestConnex toll road, while $400 million will tip in to help with extending the F3 freeway in Sydney’s south to the M2 Motorway in the city’s north.

Western Australia has received more than $1.2 billion in funding to improve a number of roads, as well as $500 million over 10 years to improve Perth’s public transport system.

Tasmania has received $500 million for a 10-year project to improve the Midland Highway, and a further $25 million commitment for work on the Brooker Highway in Hobart, while South Australia has earmarked $448 million for the South Road Superway project through the heart of Adelaide.

Also receiving a handout from the federal budget is the Australian Consumer and Competition Commission. It gets an extra $1.4 million to keep the petrol commissioner – charged with monitoring petrol prices throughout Australia – active until the end of 2014. It is the same grant the ACCC has received each year since the 2008-09 budget.

The budget papers show that the luxury car tax – a 30 per cent slug on vehicles costing more than $59,133 unless they sip no more than 7.0 litres per 100 kilometres and the threshold increases to $75,375 – earned $430 million for the government coffers. Next year, though, the federal government expects this figure to fall to about $400 million.

Excise on imported cars netted the government $920 million, the budget papers show, and is expected to earn the same amount next year..

The federal government still earned $6 billion from the 38.143 cents-a-litre excise on petrol, and $8.6 billion from the similarly scaled diesel fuel excise.

The budget papers’ forecast expects revenue from the fuel excise to fall slightly to $5.9 billion but diesel fuel excise earnings to rise to $9.1 billion.

The Victorian Automobile Chamber of Commerce, which represents the interests of numerous car-industry groups, said today that the budget was bad for small business, and described the “tendency of this government to spend more and tax more” as regrettable.

“Small business is all too often the target of new or increased taxes. Faced with this deficit, the government, and the next, must review spending and not saddle the burden of debt on small business,” it said.

“Small business confidence remains weak and depressed because of uncertainty and broken promises such as new carbon taxes, new mining taxes, and promises to cut company taxes have not been kept.

“Time will only tell but, on the face of it, small business owners are unlikely to be encouraged to invest by this budget and will likely regard trading conditions as flat and unimproved,” the VACC said.

It called on the federal government to encourage state and territory governments to abolish payroll tax to help reduce the burden on small business.

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