By Boyd Champness

TWO-THIRDS of Federal Government spending over the next four years will be directed at rural and regional Australia following the release of the Federal Governments Budget last week.

The Howard Government will spend $A1.8 billion (680m) on rural and regional communities over the next four years in an attempt to bridge the economic divide between country and city Australia.

Rural Australia was the biggest winner by far out of last weeks Federal Budget, as the Howard Government attempts to shore up support in country areas ahead of next years Federal election.

The money will be spent on

  • better bush health services;
  • equal access to digital television;
  • cheaper petrol; and
  • improving the business skills of farmers.
The new funding comes in the wake of millions of dollars already spent on regional initiatives.
  • The centrepiece of the Governments rural allocation is health, with $A562m being spent on health over the next four years to provide more doctors and better specialist services to country areas.
    One of the biggest problems facing rural health is convincing doctors to work in rural and remote areas.
    The health package includes an innovative scheme to provide university scholarships to 100 medical students, who would then be required to spend their first six years as doctors in rural areas.
  • The Government will also spend $A309m to extend the Agriculture Advancing Australia program.
    Of that money, $A167.5m will go to a program designed to improve the business skills of farmers.
    The remainder will go into projects to assist rural families in financial difficulty and to encourage farmers to embrace new technology and production techniques.
  • The Government has also pledged $A500m over the next four years to ensure rural petrol prices dont rise in the wake of the Goods and Services Tax which will come into effect on 1 July.
  • Regional television stations will receive $A260m over 13 years (including $A100m over the first four years) to help them cope with the introduction of digital broadcasting systems.
While rural Australia was the biggest winner in last weeks Budget, it fell short of the National Farmers Federations pre-Budget call that $A4bn needed to be spent in rural Australia over the next four years to arrest the decline in country areas.

In addition, once the Federal Governments $A500m commitment to ensure rural petrol prices dont rise as a result of the GST, is subtracted, the regional spending package is reduced to $A1.3bn.

Before the Budget, the NFF said it would like to see rural health and infrastructure rocket to the top of the Governments priority list. p> And while the health package was warmly received, the miniscule infrastructure package bore the brunt of the Federations wrath.

“We are particularly pleased with health,” NFF president Ian Donges was reported as saying in the Stock and Land.

“It goes a long way towards rectifying problems that have been built up over a long number of years.

“The Government have got it half right (health), but there is this other fundamental half (infrastructure) which still needs attention, and I will be looking for some announcements in the months ahead,” he said.

The entire Budget surplus of $A2.8bn will come from the sale of “spectrum” licences to operate mobile phone networks, digital TV and the Internet.

Market analysts were not overly impressed with the Budget, primarily because the surplus relies on the sale of further assets and may be eroded in the event of economic downturn.

The Australian Dollar fell 1/2 following the release of the Budget and is hovering precariously low at around 58 to the US Dollar.