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Qld: Budget's infrastructure spend vital for recovery: Qld

12 May 2009 9:35 PM

BRISBANE, May 12 AAP - The federal budget has delivered on infrastructure investment that will be central to economic recovery, Queensland Treasurer Andrew Fraser says.

He said the budget's big infrastructure spend was good in the short term because it would boost the economy through jobs - the central economic policy of the Bligh government.

"But it's also important for the longer term capacity of the economy and it's ability to recover," Mr Fraser said.

"We have seen investment in the billions of dollars around Australia and here in Queensland.

"Chief among those are the national highway ... and the Gold Coast rapid transit project.

"The Gold Coast is one of Australia's largest and fastest growing cities and infrastructure investment in the Gold Coast is vitally important."

Mr Fraser said the story of the federal budget was also the story of state budgets, in that they were all "under pressure from massively falling revenues".

"The translation point for that is in GST receipts because the GST is really a proxy for the health of the economy," he said.

"If you look at the GST figures for Queensland in our budget last year, for this financial year, we were looking at an expectation of $8.7 billion - the number in the budget starts with a seven and that $700 million writeoff in just one year alone tells us the story of the massive pressure from falling revenues that's been visited on our budget."

Mr Fraser said Queensland's ageing population posed other huge challenges.

"One is meeting rising health costs, another is making for sustainable retirement income systems.

"The budget increase to pensioners, despite the massively difficult circumstances, is the right thing to do.

"It's an important step in recognising that pensioners have been doing it tough, and it will be welcomed by them.

"We're all living longer and ultimately policy needs to adjust to that reality."

Mr Fraser also welcomed the continuation of the more generous first home owners grant for six months.

"We're not out of the woods yet and a full recovery in the housing sector is some way off so extending the boost for a period of time will assist in bringing on that recovery," he said.

The Treasurer made it clear the implications for the Queensland budget related to the write down in GST revenue.

"Obviously as we go through the fine detail of the Queensland budget that's an important point for us to look at," he said.