AAA condemns federal budget

The federal budget was handed down two nights ago and the Australian Automobile Association has already responded with some no-nonsense advice for the government.

'Spend more money on road infrastructure' is the fundamental message the AAA has to offer the Gillard government. Based around the role road building has to play in improving road safety, and in much greater detail, the Association's argument was spelled out in a press release issued yesterday.

“Motorists have been let down and the result will be that road safety is compromised,” AAA Executive Director Andrew McKellar was quoted saying in the press release. “The AAA has warned the Federal Government of the consequences of failing to properly invest in essential land transport infrastructure and this is a missed opportunity.”

“The current approach to road funding is deeply flawed.  Motorists pay 38 cents a litre in fuel excise, yet only seven cents will be returned through investment to improve road infrastructure – far from a fair deal. We urgently need a new model that takes a longer term view to ensure that motorists get a fairer deal for the taxes they pay and where the government looks beyond the year-to-year budget cycle.

“It is encouraging that much-needed additional funding is available for the Pacific Highway in New South Wales but now we need to see governments agree to complete the work. However, it is important to remember that overall funding for road infrastructure has been reduced, meaning other crucial projects will miss out.

“Our analysis shows one in six highways are rated as high risk, an unacceptable road safety outcome. There is a clear link between improved road infrastructure and lowering the risk of deaths and serious injuries.  Reduced investment means lower crash ratings,” McKellar explained.

According to figures provided by the Association, the budget allows $3.64 billion for road construction in the 2012/13 financial year — effectively half the figure set aside for the current financial year, $7.36 billion.

“This is a significant reduction in investment in road infrastructure and it simply isn’t good enough,” said McKellar.

It wasn't only the AAA who berated the government over the budget. The Victorian Automobile Chamber of Commerce went in swinging with two press releases on consecutive days. VACC Executive Director, David Purchase was quoted in both and criticised the government's decision to forego the "promised 1 per cent company tax rate reduction" for business. He was also critical of the change to superannuation funding by employers, now facing an extra three per cent impost on wages. Luxury Car Tax also received a mention from the VACC boss, who described the on-going LCT as "an unfair and inappropriate imposition on vehicle purchases".

Purchase did commend the government for its $6500 tax write-off component in the budget, and welcomed the $25 million Car Industry grant for component suppliers, but in the main the VACC's view is that the budget lacks substance.

“The Treasurer was so insistent on delivering a surplus forecast in the Federal Budget that he took his eye off the target, ” Purchase was quoted saying in the second press release . “Generating small business confidence, supporting manufacturing and encouraging training, skills and trade apprenticeships are key areas the Treasurer should have made more provisions for. VACC’s member businesses need a stable economy in which they can operate, but stability does not have to mean a $1.5 billion surplus. Business can remain active in a well-managed economy and, given the global economic conditions, we would have preferred if the Treasurer had facilitated a competitive environment, rather than striving for a surplus”.

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