BUDGET 2013: Full coverage

The NSW federal MPs, whose support helped Julia Gillard cling to power after the 2010 election delivered a hung parliament, said the budget provided ‘equity’ for regional and rural Australians.

“When you think about it from a regional Australian perspective, the equity principal is one that means a lot,” Mr Oakeshott told Fairfax Regional Media in Canberra.

“So the big-ticket items….for school-based education reform are a big win for regional Australia. It actually puts a loading on students from rural and regional areas.

“Likewise (under) the National Disability Insurance Scheme, finally many people in rural and regional areas who are living with disabilities or are carers with pretty limited support networks now will get that equity principal delivered.”

Mr Windsor said regional funding programs the Gillard government signed up to during the 2010 negotiating period had largely escaped the budget axe. He said he hoped future governments would continue to spend more money in regional areas.

“Both Tony Abbott and Julia Gillard admitted during that 17 day (negotiating) period that regional Australia had been ignored,” Mr Windsor said.

“We saw this as an opportunity to rectify some of those issues but three years doesn’t cure the ignorance of decades.

INTERACTIVE GRAPH: Hover over the lines to see government expenditure over the years

Budget hits regional Australia

Wayne Swan has used his sixth and possibly final budget to begin dramatically winding back spending on infrastructure in regional Australia.

Against the backdrop of an $18 billion budget deficit, the Gillard Government has directed big spending away from infrastructure and towards its two flagship policies – the National Disability Insurance Scheme (now known as DisabilityCare Australia) and the Gonksi education reforms.

The two projects are expensive, costing the federal government a total of $29.1 billion over seven years. Combined with a $17 billion hit to revenues in the 2013/14 financial year, there’s little room left for an infrastructure cash-splash the likes of which regional Australia has enjoyed since Julia Gillard struck a deal with regional independent MPs to cling to power in 2010.

The impact of lower than forecast revenue from the carbon tax will inflict a big blow on future regional infrastructure. One of the biggest recipients of mining tax revenue, the Regional Infrastructure Fund, was due to receive $4.4 billion over nine years but on current estimates, will now receive just $2.4 billion.

Another key source of cash for popular local projects like bypasses, swimming pool and museums, the Regional Development Australia Fund, has escaped the budget axe. Regional Development Minister Anthony Albanese will begin announcing successful third round applications this week.

However, once that fund has been exhausted, there will be very few left that are dedicated to regional infrastructure – a significant departure to the government’s previous approach.

Unveiling the budgets in Canberra on Tuesday night, Mr Swan said falling revenues had triggered some difficult decisions. However, on the whole, the budget razor gang has avoided savage cuts.

“Just because the global economy took an axe to our budget does not mean we should take an axe to our economy,” Mr Swan told federal parliament.

But savings to pay for DisabilityCare Australia, Gonski reforms and minimize the blow from falling revenues have been found in some areas. The government will axe the popular but controversial baby bonus from March 2014, work to close offshore tax loopholes, introduce a two-year efficiency dividend on universities and dump or delay tax breaks and household assistance linked to the carbon tax.

Some $500 million in funding previously reserved for carbon capture and storage projects has been axed and assistance available to help dirty coal mines deal with the carbon tax trimmed by $274.2 million.

Some of the larger regional projects and programs the government has found money to fund include $330 million to prop up the Tasmanian forestry peace deal, the continuation of the Pacific Highway duplication in NSW, the reconstruction of the Midland Highway in Tasmania, a Ballarat freight hub, improved road access to Wollongong and rebuilding large parts of the Bruce Highway in northern Queensland.

Details of other nationally-significant budget measures were also revealed for the first time on Tuesday night, including $434 million over four years for the Royal Commission into Institutional Responses to Child Sex Abuse.

Nearly $100 million has been set aside for a new ‘farm household allowance’, which will support farmers experiencing hardship.

The government has outlined a ‘sensible pathway’ to a surplus by 2016/17. The deficit will be $18 billion in 2013/14, $10.9 billion in 2014/15 and nearly $1 billion in 2015/16. Interestingly, the budget papers have foreshadowed two ‘large and important transitions’ over the next four years, the biggest what appears to be the beginning of the end of the mining investment boom.

“Following the largest investment boom in Australia’s history, the resources sector will transition away from the investment phase towards exceptional growth in production and exports,” the papers noted.

“More broadly, the Australian economy will transition to non-resource drivers of growth.”

Economic growth has been tipped to dip as a result this coming financial year.

Mr Swan told parliament the transition “will not be seamless”.

“Unemployment is forecast at 5 ¾ per cent in 2013/14, up slightly, but still among the lowest in the developed world,” Mr Swan said.

Gillard government ministers will now embark on a national sales pitch to sell the budget ahead of the September election. Opposition Leader Tony Abbott will formally respond to the budget on Thursday.

INTERACTIVE GRAPH: Explore the areas of government spending over time by using the checkboxes to choose different sectors to compare