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Victorian economy is strong VICTORIA'S Treasurer John Lenders ay released the 2006-07 Annual Financial Report, saying it confirmed the ongoing strength of the Victorian economy.Mr Lenders said the report, tabled in State Parliament, showed the State's finances were in good shape with a higher than expected surplus, low levels of debt and net financial liabilities at their lowest level (as a percentage of GSP) in over 50 years. "This has been achieved despite the impact of the drought and while investing a record $3.3 billion in infrastructure in 2006-07," he said. "On average, in June 2007, each Victorian was supported in real terms by $11,427 worth of public infrastructure." Mr Lenders said the strong performance of the Victorian economy had provided the State with an operating surplus of $1.365 billion. "The strong surplus position has given the Government a greater capacity to invest in the projects that matter to Victorians," he said. "We can now bring forward our commitment to purchase eight additional metropolitan trains at a cost of $272 million in addition to investing $600 million in the Food Bowl Modernisation project." Mr Lenders said the surplus had been driven by a number of factors, most significantly a one-off $390 million contribution from WorkCover and the TAC in income tax equivalents from investment returns. Stronger than forecast revenue from land transfer duty, land tax and payroll tax (due to high employment growth) also contributed to the surplus. Mr Lenders said the increase in land tax revenue was in significant part due to greater compliance with taxation arrangements around trust provisions. "Much of the increase in land transfer duty results from changes to superannuation arrangements announced in the 2007-08 Federal Budget," he said. "As these changes took place after our budget they could not be factored into our budget estimates." Without the one-off boost from investment markets and the impact of stronger employment and property sales, the surplus would have been $865 million. "Because this additional income has mostly been generated from one-off events, it would be financially irresponsible to use it to make ongoing recurrent funding decisions," Mr Lenders said. Key results in the 2006-07 Annual Financial Report include: *?The 2006-07 operating surplus (net result from transactions) for the General Government sector is $1.365 billion; ??Record infrastructure spending in 2006-07 of $3.3 billion, $590 million more than the previous year; ??Net financial liabilities were $12.8 billion or 5.2 per cent of GSP as at June 30 - down 1.9 billion on last year due to a decrease in the superannuation liability; ??General Government net infrastructure investment has risen from $1 billion in 1999 -2000 to an annual average of around $2.1 billion in the seven years to 2006-07; and ??Net debt for the General government sector was around $2.7 billion in 2006-07 or 1.1 per cent of GSP, $300 million lower than forecast in the May 2007 State Budget. "We have again delivered on our key promise to maintain a surplus of at least 100 million, kept net debt low and delivered world-class infrastructure to maximise economic, social and environmental benefits for Victoria," Mr Lenders said. The Victorian Government's AAA-credit rating has recently been reaffirmed by international credit rating agencies, Standard and Poor's (September 2007) and Moody's (January 2007). |
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