Treasurer Wayne Swan delivers his Budget speech to the House of Representatives. Picture: Gary Ramage Source: News Limited
Budget 2013: Treasurer Wayne Swan delivered his Budget speech to the House of Representatives and the Australian people on Tuesday 14th May 2013, in Parliament House in Canberra. Picture: Gary Ramage Source: News Limited
FUNDS for families will be scythed by close to $5 billion as the government sets out to harvest $43 billion in spending cuts over four years, the Budget reveals.
It will be a bitter harvest for many voters in an election year, with extra household expenses for a range of activities - from having a baby to having a cigarette.
What do you think of the Federal Budget? Tell us below
Family-based payments will be cut by about $2.5 billion over four years and the pause in indexation of Family Tax Benefit-A continued, forestalling any rise in its benefits.
Health costs will rise. Some $1.7 billion will be saved over four years by starting the Medicare safety net after $2,000 in personal expenditure rather than the current $1,200; delaying moves in the rebate on fees for seeing a doctor; and phasing out a medical expenses tax offset.
This will be in addition to the 0.5 per cent increase in the Medicare levy, already announced, to contribute $20.4 billion over five years to the national disability scheme.
The biggest single change is the abolition of the Baby Bonus, which will be replaced by extra concessions under Family Tax Benefit-A - received by middle-income families with total incomes of up to $112,000 a year. This would save about $900 million over four years by effectively means-testing the assistance.
The new scheme will start in nine-and-a-half months.
And the excise on cigarettes will go up by about seven cents a packet of 25. Indexation of the excise will be linked to movements in average wages, rather than to the lower Consumer Price Index.
Even self-improvement will cost more. The government wants to cap the tax deduction for work-related self-education at $2,000 a year.
One piece of good news was a program to help older people move out of family homes -- which often are too big for them -- and keep the proceeds of their sale without their aged pension being affected.
The Coalition slammed the budget, saying it showed the nation's finances were in "complete chaos" and that Labor could not be trusted.
Shadow treasurer Joe Hockey said the flawed strategy included more broken promises on family payments, higher taxes, debt levels breaching the $300 billion ceiling and "no credible path back to surplus".
"Budget 2013 delivers more debt, more deficits, more taxes, more broken promises and more uncertainty from an incompetent Labor Government that can't be trusted,'' Mr Hockey said.
"(It) confirms that Labor's financial and budget management is in complete chaos."
The Budget also outlined plans for $24 billion in road and rail projects in capital cities. Just $4 billion will be spent in the next four years, with the remainder forward spending planning.
But that was a relatively lonely item of good news in a Budget which was dedicated to wide spending reductions and long-term funding of projects Treasurer Wayne Swan said were fundamental to the nation's future.
Treasurer Swan outlined significant objectives to justify the pruning and, he hopes, to convince voters extraordinary measures are needed during extraordinary economic times.
The aim is to pay for extra school funding under the Gonski scheme and provide for the disability insurance scheme. Plus, Mr Swan wants to get the Budget back in balance by 2015-16. But first the government would have to overcome a $19.4 billion deficit for 2012-13 and a projected deficit of $18 billion for next financial year, 2013-14.
Mr Swan said he would not want voters to think "that we were going to dog the task of actually stumping up the money for doing the school improvement program, or (that) we couldn't really provide for the peace of mind and stability that was required for Disability Australia to be funded".
"I couldn't live with myself if that was the approach I took," he told reporters, insisting the September 14 election was not a consideration.
But he said, "We understand there will be some people who are unhappy about this (baby bonus) decision."
