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Federal Budget 2011: Little For Motorists

There is little joy for motorists in Federal Treasurer Wayne Swann's fourth Budget, the first of the Gillard Labor Government.

With both interest rate and inflationary pressures impacting on fiscal policy settings, a carry-over deficit and the


There is little joy for motorists in Federal Treasurer Wayne Swann's fourth Budget, the first of the Gillard Labor Government.

With both interest rate and inflationary pressures impacting on fiscal policy settings, a carry-over deficit and the Queensland floods to pay for, most were expecting a tight budget - which is what we got.

Long-suffering Sydney motorists however will be dismayed to find that a major feasibility study to alleviate traffic pressures on Sydney's outer arterials (the F3 to M2 'orbital' project) has been pushed back to 2015 and beyond.

There is however an extra $750million for NSW to continue duplication works on the Pacific Highway (available if matched by the state government); plus funding for the Tenterfield bypass and Bolivia highway, and Holbrook and Bega bypasses, as part of $2.4 billion ear-marked for NSW projects this financial year.

Roads both into and out of Sydney, Melbourne and Brisbane are long overdue for major upgrades; but mostly overlooked in this Budget. Delays to needed road infrastructure spending is bad news for productivity.

Grid-locked arterials in Melbourne and Sydney, thanks to years and years of neglect, spiralling outer-suburban populations, and inept planning by state governments and their departments, are hurting business and the economy, not to mention infuriating commuters.

The pickings for Victoria are slim with $448 million allocated to the Regional Rail Link, plus additional commitments to extend the Geelong Ring Road, to strengthen the West Gate Bridge, to realign the Western Highway and widen Clyde Road in Berwick.

How is it that roads, rail and ports continually find themselves at the back of the bus with delayed projects and spending come Budget night? Compare this Budget with the $25 billion promised to rail, road and port projects as part of the 2009 Federal Budget.

On the plus side, and expected to save the Government in excess of $1billion, the Treasurer has addressed Fringe Benefits Tax (FBT) applied to cars supplied to individuals as part of a salary package.

Replacing an absurd regime whereby the tax benefit increased with increased vehicle use (ie. the more kilometres you drove, the greater the tax concession), and which thus saw cars been driven senselessly to simply rack-up extra kilometres as the financial year drew to a close, has been replaced by a single 20 percent taxable rate against the value of the car.

(Under the old regime, if you drove less than 10,000km in a year, you were taxed on 26 percent of the car’s value. This dropped to 20 percent if you drove more than 10,000km, dropping again to 11 percent if you covered more than 25,000km and sliding to seven percent at 40,000km covered within the financial year.)

For small businesses, there was also a little joy on capital purchases.

They will now qualify for a $5000 tax concession for new capital outlays for the business, which includes vehicle purchases. In other words, a $5000 claimable rebate off their tax. This will likely sell a few more utes and SUVs with heavy-duty towbars. 

- Tim O'Brien, TMR Managing Editor.

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