In Business

Victoria Premier Ted Baillieu

Federal Budget Short-Changes Victorian Families On Health, Mental Health And Infrastructure

Victor P Taffa

There are many disappointments in the 2011-12 Federal Budget for Victoria.

Victoria has been short-changed compared to other states on health and mental health funding, infrastructure (especially regional rail) and manufacturing assistance (South Australia gets a $10 Million assistance package while Victoria gets nothing).

Over the forward estimates, the Commonwealth is receiving an extra $115 Billion, yet additional payments to Victoria over the forward estimates amount to $2.3 Billion a pittance.

None of the Budget’s $916 Million in spending on regional infrastructure will come to Victoria.

Victoria is also likely to be affected by the redirection of funding from Cooperative Research Centres and reductions to capital spending on defence.

Infrastructure

The Budget fails to allocate significant levels of funding to major Victorian infrastructure projects. Instead, it short-changes Victoria by $1.9 Billion on roads while confirming the complete or partial deferral of funding for two Victorian infrastructure projects.

The Budget confirmed a deferral of $500 Million of $3.2 Billion funding committed to the Regional Rail Link, which will see funds allocated to the project paid in 2015-16, delaying the anticipated completion of the project from 2014.

A total of $20 Million in funding for the upgrade of the Princes Highway between Traralgon to Sale has also been deferred and will recommence in 2013-14.

Victoria will receive a smaller share of Commonwealth roads funding than its share of the population 15.7 % of funding despite having approximately 25 % of Australia’s population.

Health

Victoria received just $182.5 Million for 15 projects under the Health and Hospitals Regional Priority Round, representing around 14 % of the $1,328.8 Million that was invested in projects across Australia, well below Victoria’s population share of 25 %.

This is a poor outcome compared with $446.4 Million for New South Wales, $243 Million for Tasmania (including $250 Million for the Royal Hobart Hospital Redevelopment) and $163.9 Million for Queensland.

Victoria will receive $33.2 Million over three years under the National Partnership (NP) on financial assistance for long-stay older patients, representing a 12 % share of the available funding. The 2010-11 Federal Budget estimated that Victoria would receive $70 Million over three years based on a per capita share.

The new funding share is based on a census of long stay older patients. Victoria has a relatively low number of long-stay older patients due to significant state investment to reduce length of stay.

Victoria is effectively being penalised for investing to improve the performance of our hospital system.

The Budget provides very little in terms of investment to improve primary care to ease the pressure on public hospital emergency departments.

The Commonwealth is deferring the $448.4 Million for the coordinated diabetes care initiative, and is only investing $49.9 Million over two years to extend incentives to general practices to support after-hours care until July 2013, and $45.1 Million over four years to bring forward the establishment date for 15 Medicare Locals to 1 January 2012.

The Budget makes no real progress on dental services the Gillard Government has announced a national program of $53.1 Million over four years compared with a Victorian Coalition Government budget investment of $26 Million over four years for dental health.

Victoria needs more Commonwealth funding for our public dental health services here in Victoria.

Mental health

The Budget papers (p28, Budget Paper 3) state that Victoria will not receive any of the funding set aside to establish Early Psychosis Prevention and Intervention Centres (EPPIC). Victoria trusts that this is a mistake which will be rectified promptly.

An indicative distribution of the $222 Million for up to 16 new EPPICs is allocated on an equal per capita basis for states, except for Victoria, which has been assigned no funding.

This is in stark contrast to the Coalition Government’s $104.8 Million investment in mental health in last week’s Victorian Budget to fund a comprehensive approach to improve early intervention, diagnosis, community and inpatient treatment and ongoing accommodation for people with a mental illness.

Water

The Gillard Government is cutting $100 Million from two different water projects ending the $14.5 Million program for installation of household water tanks and grey water systems and reducing by $85.5 Mllion funding to support desalination, water recycling and stormwater harvesting. This is in stark contrast to the Coalition Government which included in its Budget last week funding of $40 Million for rebates for water-efficient appliances including water tanks and $50 Million for communities to adopt increased stormwater harvesting and recycling.

Research

Funding cuts to the Cooperative Research Centres (CRC) Program are a short-sighted policy that ignores the direction set by the Commonwealth Government’s own 2008 innovation review.

Such cuts are also likely to have adverse effects on Victoria’s outstanding research capability. CRCs are an important part of Victoria’s innovation landscape and Victoria has performed strongly in securing CRCs for the State.

Of the current 42 CRCs, 14 have their headquarters in Victoria, with a further two new Victorian CRCs to commence in July 2011. The Commonwealth Government has the primary role to play as the key funder of research activity and infrastructure in Australia. The Victorian Government will advocate for the Commonwealth to provide appropriate funding for research in Victoria. Initiative Cth. Budget announcement Expected Victorian Allocation Shortfall
Health and Hospitals Regional Priority Round $182.5 M (14 % of national allocation)$332.2 M (25 % of national allocation)$149.7 M
National Partnership for Long-Stay Older Patients $33.2 M (12 % of national allocation)$70.0 M (agreed at COAG in 2008)$36.8 M
Mental Health – Early Psychosis Prevention and Intervention Centres (50/50 partnership with States) Zero$55.5 M (25 % of national allocation)$55.5 M
Nation Building Programme (road funding component only) $3.6 BN (16 % of national allocation)$5.7 BN (25 % of national allocation)$1.9 BN
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