THE Bracks Government is swimming in money as Victoria heads to an election.
Victoria's Mid-Year Financial Report, released yesterday, shows the budget surplus for the first half of the financial year was $811 million — way above the forecast full-year surplus of $331 million.
The Opposition last night said Treasurer John Brumby now had no excuse for continuing to ignore pleas for big tax cuts in the May budget.
But Mr Brumby moved to dampen expectations of a spending spree in the lead-up to the November state election, saying "it would be a mistake to suggest the state has the capacity to increase spending".
Opposition treasury spokesman Robert Clark said stamp duty and land tax should be first in line for cuts.
"Victoria's first-home buyers are paying some of the highest levels of stamp duty in Australia," Mr Clark said.
"There have been no changes to stamp duty rates in Victoria since the Bracks Government was elected (in 1999), despite soaring property prices.
"Stamp duty on the typical Melbourne house is now more than 80 per cent higher than when the Bracks Government was elected."
Mr Clark said the 50 per cent cap on land tax increases, announced in last May's budget, would end this year, "meaning that if the Government fails to act in the upcoming budget, many small to medium size businesses and other property owners will be hit with huge increases in their land tax bills next year".
Mr Brumby said that while the figures showed the economy was going well, the state budget faced several risks, including the impact of high oil prices, the prospect of higher interest rates and the pressure on exporters caused by the strength of the Australian dollar.
He warned against assuming the full-year surplus would come in around double the half-year figure of $811 million.
"As with most years, a greater amount of spending takes place in the second half of the financial year and it is for this reason that simply doubling the half-year result is not a good indicator of the full-year budget result," he said.
"The 2005-06 mid-year result partly reflects higher than expected year-to-date investment income from public corporations, due to the strong performance of equity markets."
But Mr Clark said continued high levels of stamp duty and increased Commonwealth grants were also strong contributors to Mr Brumby's cash flow.
"The stockmarket returns have allowed the Government to extract $641 million in dividends and other payments from public bodies such as the Transport Accident Commission, WorkCover and water authorities over the six months to December 31, compared with the budgeted full-year revenue of $836.8 million," he said.
"Revenue from stamp duty on home buyers and other property purchasers is also well above target, with 58.6 per cent of the budgeted annual revenue having already been received in the first six months of the year."
