Tasmania announces A$3.9bn infrastructure program

The sum is to be spent over the next four years and comes amid a budget deficit of A$117m and cost-cutting measures in the public sector.

Australia’s Tasmanian government will spend a record A$3.9 billion ($3.1 billion; €2.2 billion) on infrastructure over the next four years, the state announced in its 2009-2010 budget.

In that period, the budget will provide A$2 billion for infrastructure projects while government-owned entities will take on the remainder.

Between 2009 and 2010 alone, Tasmania’s infrastructure investment will amount to about A$746 million. This includes approximately $275 million to be spent on roads and rail; A$240 million on education; A$130 million on housing; A$79 million on health and A$14 million on tourism, recreation and culture. The spending is designed to support about 6000 Tasmanian jobs.

Tasmania’s infrastructure spend comes amid the budget’s net operating deficit of A$117 million for 2009-2010. The island state is facing a loss of A$1.5 billion in goods and services tax revenues and state taxation receipts due to the global financial crisis, the Tasmanian government said in a statement.

Cost-cutting measures such as wage freezes and about 800 layoffs in the public sector are also being implemented, although “front-line services” including health, education and policing will be quarantined from such measures.

The government aims to return to a net operating surplus of A$74 million in 2012-2013.

The  government also plans to pay the interest costs of any borrowings which local governments undertake to build new infrastructure in Tasmania’s regional areas, Michael Aird, the Tasmanian government’s treasurer, said in a statement.

Various Australian states are investing record sums into infrastructure in an effort to create jobs and lift their economies out of recession.

New South Wales (NSW) recently announced it will spend A$62.9 billion on its infrastructure over the next four years, aiming to support up to 160,000 jobs a year. The sum is the largest infrastructure spend in NSW’s history.