There was more pressure than the TEE this week as governments prepared their budgets - Education was the topic du jour in Canberra, while WA business wants to teach Treasurer Eric Ripper a lesson, and kids say the darndest things to the Prime Minister.
For those who missed last week's late-breaking Arch, please click HERE.
Western Australia's budget
As Melbourne University economist Professor Neville Norman told a breakfast meeting of the Institute of Chartered Accountants this morning, "Peter Costello is the second luckiest Treasurer in Australian history. The luckiest we heard from last night."
But if Treasurer Eric Ripper expected a positive response for his seventh budget, he would have been sorely disappointed today, with criticism coming from both business and social services groups today.
The centrepiece of the state government's 2007 budget is a $433 million tax relief package targeted at first home buyers, property owners and motor vehicle buyers.
First home buyers purchasing a property for up to $500,000 will be exempt from stamp duty under the changes, which is double the previous exemption and will deliver a saving of up to $20,700 for first home buyers, costing the state government an estimated $80 million.
Housing groups described the changes as positive, but the WA Council of Social Service compared the policies to fixing holes on the Titanic.
WA Business News reported yesterday that the continued strong economic growth means the tax cuts will be largely covered by further growth in payroll tax collections and mining royalties.
That part of the equation drew criticism from the Chamber of Commerce and Industry, with chief executive John Langoulant labelling the government complacent, happy to profit from the resources boom.
"Growth in government spending continues to be a concern for business, which pays the lion's share of state taxes," he said.
"In 2007-08, the Government will fail to meet its expenditure control target for the sixth year in a row. General government spending has ballooned by 10.6 per cent this year, and is projected to grow a further 4.6 per cent in 2007-08."
Mr Langoulant also criticised the government's retention of payroll tax in the budget, which he said showed it was not serious about tax reform.
The comments drew a predictable response from Mr Ripper.
"I want to say to John Langoulant, there's a couple more (tax priorities) ahead of payroll tax according to the state tax review," he told a business breakfast this morning.
"I'm always open to tax reform, but I want dinkum, balanced, fair analysis of what we've actually done."
Yesterday's budget also suspended and deferred capital works projects worth $565 million to make room for its preferred projects in areas like health, power and water.
The decision reflects the big increse in costs and the acute labour shortages in Western Australia's overheated construction sector.
After adjusting for the deferred projects, the government will still spend a record $5.8 billion on capital works next financial year, including $750 million to cover construction of a major new water supply source and complete funding the Fiona Stanley Hospital, expected to cost in excess of $1 billion.
As expected, the government has suspended the Northbridge Link project, saving $133 million next year and $255 million in total.
It has also suspended the planned $24 million upgrade of Members Equity stadium, which had been earmarked as the new home for the Western Force rugby team.
Treasurer Eric Ripper said the government has not made any decisions, nor provided any funding, for a major new sporting stadium.
Further details of budget policy can be found HERE, HERE and HERE.
For his part, Opposition Treasury spokesman Troy Buswell accused Mr Ripper of mismanaging the state's boom economy.
"Eric Ripper will still collect more than $40 million in land tax revenue in 2007-08 than what he expects to collect this financial year," he said.
"Once again, the Treasurer has failed to share the State's economic prosperity with the Western Australian community."
Mr Buswell said the Government had spent just $95million on its tax cuts, yet was collecting $590 million extra in increased fees and charges.
These included an announcement on Tuesday that state government charges would cause the average family's water bill to rise by $28 per year, or 52 cents per week, with third party vehicle insurance to increase by ten dollars, and a five per cent rise on public transport fares for adults travelling more than two zones.
Mr Ripper said in an announcement that the money raised from the increased water tariff would be used on infrastructure projects.
"It will also give consumers a more realistic understanding of the cost of providing water and how valuable conserving it is," he said.
Federal Budget
Two days earlier, Federal Treasurer Peter Costello unveiled his election year budget - setting the scene for some major announcements, including personal tax cuts worth $31.5 billion over four years to "reward effort", building on the $36.7 billion worth of cuts in the last budget.
The cuts will take effect in two stages, with the first from July 1 this year when the 30 per cent tax rate will apply only to wages over $30,000, up from the current threshold of $25,000 and the low income tax offset will rise to $750 a year, from $600.
"These tax changes provide further incentives for those outside the workforce to enter it and for those in part-time work to take additional hours," Mr Costello told parliament.
From July 1, 2008, the 40 per cent tax threshold will be raised to $80,000, from $75,000, and the 45 per cent threshold from $180,000, from $150,000.
The government also plans to invest $22.3 billion over five years from 2009/10 in road and rail infrastructure, including $16.8 billion for the national network of road and rail.
And from July 1, 2007, it will increase the child care benefit rates by 10 per cent, on top of indexation, to help mothers who want to take part in the paid workforce, Mr Costello said.
The next day Premier Alan Carpenter hit the airwaves, saying Western Australia had been shortchanged, and deserved more infrastructure support.
He was rebuffed by Prime Minister John Howard, who labelled the claims ludicrous.
"The best thing Mr Carpenter can do for the resources boom in Western Australia is persuade his federal Labor mates to stop advocating the abolition of Australian Workplace Agreements," he said.
The next day, Human Services Minister Chris Ellison issued a press release detailing the Federal budget contributions to WA, which is pasted below:
- $40.8 million in Defence spending for WA. The approved capital facilities project for WA is the development of infrastructure for the North West Shelf Forward Based Armidale Patrol Boats, for which total estimated budget is $4 million. For Brand electorate, the HMAS Stirling: Collins Submarine Intensive Support Facility will receive a $3.9 million funding.
- $170 million Defence funding for Brand - for the Defence facilities and the 3500 ADF personnel serving in Brand; $100 million in Defence funding for Curtin - for the Defence facilities and the 2000 ADF personnel serving in Curtin; $35 million in Defence funding for Pearce - for the Defence facilities and the 850 ADF personnel serving in Pearce.
- $56.6 million to develop the Australian Square Kilometre Array Pathfinder radio telescope - a move which will strengthen Australia's position to be selected as host country of the proposed Square Kilometre Array. Boolardy Station, 700km north of Perth, is the proposed location for the telescope.
- $308 million for WA roads and railways including $170 million for the Bunbury Highway and $225.8 million for the AusLink Program (which includes the Black Spot program). There will also be $2 million to begin planning the new interchange between e Great Eastern and Roe highways; $3 million to finish the Clackline township bypass on the Great Eastern Highway; $3 million to continue upgrading the Great Eastern Highway from Tammin to Booran and from Walgoolan to Southern Cross; and $23.9 million for upgrading work on the Great Northern Highway between Apple Street in Upper Swan and Wubin.
- $83.6 million for three new Australian Technical Colleges - one in Perth. This funding will ensure that there are two ATCs in each of our largest cities. This will take the total to 28 ATCs, with 20 now open for business.
- $29 million for accommodation support for Indigenous education and health initiatives - including a secondary education hostel in Kununurra.
- $24.1 million in new funding to 20 of Australia's major performing arts companies including the Black Swan Theatre Company, West Australian Opera and the West Australian Ballet.
- $1 million for St Mary's Cathedral - conservation and completion appeal
- $100 million for the construction of two innovative research facilities at the new Fiona Stanley Hospital and Queen Elizabeth II Medical Centre. The funding will also pay part of the cost of transferring the Telethon Institute for Child Research to Fiona Stanley Hospital.
- $19.5 million for the Institute for Immunology and Infectious Diseases, to be based at Murdoch University.
- An additional $31.7 million over the next four years to increase patrols and protection of the environmentally sensitive Ashmore Reef and Cartier Island Marine Reserves off north-western Australia.
But the policy that siezed media attention this week was the launch of an endowment fund to generate earnings for capital works and research facilities at universities "forever", with an initial investment of $5 billion.
The Higher Education Endowment Fund may be topped in the future from budget surpluses and will be managed by the Future Fund board of guardians as a separate fund.
The fund will provide universities with $900 million in funding over the next three years, then continue to generate earnings to fund research institutes and provide for capital investment in perpetuity.
The proposal met with widespread approval, and has left the ALP scrambling to regain the moral high-ground on education policy.
Last night's budget reply speech from Opposition Leader Kevin Rudd included a proposed $2.5 billion allocation for teaching trades in secondary schools, as well as funding for the teaching of Asian languages.
Mr Rudd said Labor wanted to keep hundreds of thousands of young people at school for longer by giving them vocational training.
"We don't think every kid wants to go to university," Mr Rudd told Southern Cross Broadcasting today.
"We actually believe that a trade certificate is just as important and this, we think, is a practical plan to help that."
But Education Minister Julie Bishop said the plan was confusing and did not make clear whether schools would be able to deliver more than one centre.
"The funding would suggest that you could only have one per school, so that means that if you are a student who wants to do a metal trade, it might not be offered at your school," Ms Bishop told reporters in Adelaide.
Mr Rudd also pledged to halve the withholding tax on distributions from Australian managed funds to non-residents, and $250 million to plug leaky pipes in towns and cities, with equivalent funding from state and local governments.
Bits and Pieces
- Foreign Affairs Minister Alexander Downer met with Cricket Australia this week in an effort to convince them to boycott a tour of Zimbabwe, saying the nation's President, Robert Mugabe, would use their presence as a propaganda victory. The government has offered to pay a $2.4 million fine applicable to Cricket Australia for breaching its obligations to the International Cricket Council.
- To bolster the depleted DFAT coffers, the department has set a letter to the dual Australian citizens the Government evacuated from Lebanon last year, during a war between Israel and Hezbollah. It is believed DFAT is asking for a voluntary payment of around $800 per adult, and $600 for children.
- The WA Labor, Liberal and National parties have submitted their proposed changes to state electoral boundaries to the Western Australian Electoral Commission. The Liberals want the seat of Roe expanded west, Warren-Blackwood expanded east and a new seat of Collie-Wagin incorporating towns like Wagin, Narrogin and Kojonup. The ALP proposes absorbing the seat of Stirling into Warren and Albany, Wagin into Warren and Roe and splitting Avon between Merredin and a new seat - Murray-Collie. The Nationals have proposed the seats of Merredin, Avon, Wagin, Roe and Stirling be condensed into three seats called Wheatbelt, Central Lakes and Great Southern. The electoral commission is due to publish its proposed changes at the end of June.
- The WA Liberals issued a discussion paper on Indigenous Affairs which called for, among other things, a requirement that a minimum of 30 per cent of welfare payments to indigenous people be used for food products only - sparking calls of racism from some parts of the Government. Kimberley MLA Carol Martin told the ABC she had no objection to that idea in principle, but said that it should apply to all welfare recipients.
- Meanwhile, Labor backbencher Tom Stephens criticised Health Minister Jim McGinty, saying the minister focused on 'fringe issues', such as surrogacy laws, at the expense of core health areas. Mr McGinty had conceded the previous week that overcrowding was causing problems in hospital emergency departments.
- Less than two weeks after being preselected for third place on the Liberal Party's WA Senate ticket, one-time HBF general manager Mathias Cormann was endorsed by the party to take the place of retiring senator Ian Campbell. This was met with opposition from the man he was due to replace - Senator Ross Lightfoot - who criticised the party for failing to call for nominations for the vacancy.
- And two new Senators were sworn in this week with Queenslander Sue Boyce taking the place of former minister Santo Santoro and Simon Birmingham of South Australia taking the place of Jeannie Ferris.
The final word
In a week where ALP backbencher Kelly Hoare complained about a lack of "decency, propriety and courtesy" when the party moved to dump her for the higher profile Greg Combet, only to admit a week later she was in counselling for making a lewd proposition to a Comcar driver, the final word goes to Prime Minister John Howard.
The Prime Minister was visiting St Francis Xavier Catholic regional high in Canberra yesterday, when he was asked by one of the students what he did to keep his notorious eyebrows in check by a student who confessed to a similar sartorial difficulty.
Mr Howard avoided the question, but was happy to talk about it on radio today.
"He was cheeky in that sort of sense but he wasn't disrespectful," he told 3AW's Neil Mitchell.
"The whole thing was a wonderful reminder of the evenness and the openness of our country. "
Arch, whose teenage years were concerned with more pressing matters than eyebrow maintenance, nonetheless wonders if the PM applies that perspective to all the questions he's been receiving of late.
Now that would raise eyebrows.
