$400m for Swan Valley bypass
Upgrade: The Swan Valley bypass will link Muchea to the Reid and Tonkin highways intersection. Picture: Supplied

One of Colin Barnett's key State election infrastructure promises has secured more than $400 million from the Gillard Government in Wayne Swan's sixth and probably final Budget.

The cash-strapped Premier, who is already struggling to find the money to cover his election promises, will have to match the Federal pledge to ensure the Swan Valley bypass is built.

Mr Swan will use his Budget speech tonight to unveil a $100 billion infrastructure blueprint - partly funded by tapping the $1.2 trillion superannuation sector - to fund big projects across the country.

Super funds and foreign investors will be guaranteed commercial rates of return over 30 to 40 years for sinking their money into Australian roads, rail and ports.

The Treasurer will look to plant a time bomb for Tony Abbott, outlining a 10-year funding plan for the National Disability Insurance Scheme and the Gonski education reforms.

Mr Swan is expected to reveal a Budget shortfall of $10 billion to $15 billion this financial year and a sub-$10 billion loss in 2013-14.

The next small surplus will be tipped for 2016-17.

But the Government has found space to deliver half the expected cost of the $840 million, 40km bypass between the intersection of Reid and Tonkin highways and Muchea.

Mr Barnett pledged just $196 million towards the project at the election, prompting State Opposition accusations that he was banking on a Federal handout.

The State Budget has been pushed back to August in a bid for the public service and ministers to find savings to help the Government honour its election commitments.

Mr Swan, who is battling a $17 billion writedown in Federal revenues this financial year and more in coming years, will outline "significant but responsible saves" to free up funds for signature policies.

He will use the Budget to argue it protects jobs.

"Faced with a dramatic shortfall in revenue, we had to make a choice - to cut to the bone as Mr Abbott would have us do, causing unemployment to rise and hurt the economy, or put jobs and growth first while making smart investments for the future," he said.

But Mr Swan will deliver spending cuts just five months out from the election. Cuts are earmarked in areas such as Family Tax Benefit A and tax cuts of $1.8 billion planned for 2015 have been deferred.

The latest area of spending to be trimmed is foreign aid.

Foreign Affairs Minister Bob Carr said Australia's target of giving 0.5 per cent of gross national income to aid would be put back to 2017-18.

The measure, which has been criticised by aid groups, should save almost $2 billion in the next four years.

The West Australian

Popular videos

Compare & Save

Our Picks

Compare & Save

Follow Us

More from The West