THERE were no wins for Tasmanian infrastructure in May’s Federal Budget, but the $390 million upward revision of Tasmania’s GST receipts should be used to repair the State Budget bottom line.

The Tasmanian Chamber of Commerce and Industry (TCCI) says the Budget projects an optimistic yet realistic view of the growth prospects of the Australian economy and wisely commences the process of bringing the Commonwealth budget into repair after 18 months of substantial stimulus spending.

TCCI chief executive Robert Wallace said the earlier than expected return to a surplus position in 2012-13 was welcomed and this was essential to ensure higher debt and deficits did not place pressure on interest rates.

Mr Wallace said it was a fiscally responsible Budget but contained no infrastructure funding for Tasmania, so it earned just two cheers, not three!

“Disappointingly, major infrastructure investment was not a feature of the Budget and therefore there were few specific wins for Tasmania. Last year saw the big spending infrastructure Budget and this year is the stingy responsible budget with few new spending measures,” he said.

“Unfortunately this means that Tasmania has largely missed out on the previous economic infrastructure investment cycle and we must now look forward to extracting a share of the new $5.6 billion State Infrastructure Fund over the next decade.

“This could prove challenging given that the fund is largely being built by the revenues of the new mining super profits tax coming from the big resource states and those states will quite rightly be seeking the lion’s share of the spending.”

Mr Wallace said that now that Tasmania had a 10-year infrastructure plan it would have to be very sharp in presenting applications for Commonwealth funding and certainly improve on past efforts.

“There is also an opportunity for some of the new $652 million Renewable Energy Future Fund to assist Tasmanian investments, however this will require private sector buy-in.

“Skills investment has also received due recognition with $661 million directed at the Skills for Sustainable Growth strategy.”

Mr Wallace said this had long been and issue for the TCCI and Tasmanian employers and the state needed to work hard to benefit from this boost. The depreciation changes for small business and the cut in the company tax rate were also welcome. “The concern is that these important initiatives, as well as the Budget’s return to surplus are coupled with the Resource Super Profits Tax (RSPT) which will affect investment in this sector and businesses that are directly and indirectly linked to the resources industry.

“The major positive for Tasmania is the revised forecast for GST receipts that provides the opportunity for the State Government to improve its Budget bottom line. ”

Mr Swan’s Budget figures point to a $390 million revenue upgrade from the State Government’s mid-year report. This means that Tasmania has a realistic chance to return to surplus by 2011-12, a year earlier than anticipated, without the need to slash front line services. However, this will require a significant scale back of some of the more extravagant election commitments.

“The GST windfall must be allowed to flow to the bottom line and not be wasted on politically expedient spending. Such discipline will support a return to surplus and fund critical infrastructure requirements,” Mr Wallace said.

“While there were no specific further tax initiatives for business in the budget, undoubtedly tax reform is unfinished business especially in relation to the Henry Tax Review’s proposal to abolish payroll tax, provide further capital gains tax relief and the need for continued reduction in income tax.”