Herald Sun: Funding for second stage of East West Link urged to ease state’s job crisis. Stephen McMahon. 24 February 2014
Treasurer Michael O’Brien is facing a delicate juggling act as he tries to retain Victoria’s AAA credit rating. Source: News Limited
THE Napthine Government has been challenged to borrow more to fast-track stage two of the East West Link to help ease the state’s growing jobs crisis.
Victoria’s biggest employer group says funding the road project is the key challenge for May’s State Budget.
Treasurer Michael O’Brien is facing a delicate juggling act as he tries to retain Victoria’s AAA credit rating while halting the surge in unemployment as the manufacturing sector shuts up shop.
Victorian Employer’s Chamber of Commerce and Industry chief executive Mark Stone says growth-friendly policies are needed to support job creation in the state.
“As the Victorian economy continues to adapt in the face of its current challenges and strong international competition, we must capitalise on our strengths in established industries and accelerate prospects for new ones by lowering the cost of doing business and supporting employment growth,” he said.
Treasurer Michael O’Brien said a record infrastructure investment of almost $6 billion this year would rise to more than $7 billion next year.
“However, we must keep our debt at manageable levels to keep our state strong,” he said. “Victoria can’t afford a reckless spending spree that would weaken our economy and put pressure on taxes.”
Victoria’s jobless rate is at a 12-year high of 6.4 per cent and many economists expect it will nudge closer to 7 per cent over the coming months, with the end of Ford, Holden, and Toyota car production, and the closure of the Alcoa aluminium smelter tipped to put more than 5000 people out of work.
VECCI estimates the Government could borrow up to $8 billion over the forward estimates without endangering its credit rating.
It also wants the state’s payroll tax lowered to 4.7 per cent or the threshold lifted from $550,000 to $850,000 to help boost jobs.
Prime Minister Tony Abbott is believed to be considering plans to contribute up to $1.5 billion for stage two of the East West Link connecting CityLink to the Western Ring Road.
VECCI chief economist Steven Wojtkiw said the Treasurer had “wiggle room” to get the state moving by borrowing more money while rates were at record lows.
“The Government should look at selling existing assets such as Melbourne Port or unused land to bankroll new infrastructure projects,” he said.