Wayne Swan’s sixth budget plots a path to surplus by cutting bonuses for middle income Australians while protecting their flagship welfare and education reforms.
The Treasurer unveiled an $18 billion deficit for 2013-14, coming on top of a $19.4 billion deficit for this financial year, with no return to a substantial surplus until 2016-17.
Given last year’s budget forecast of a $1.5 billion surplus, the government’s estimates proved to be off by around $20 billion.
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Declaring this year’s budget to be about ‘‘consistency,’’ Mr Swan has avoided traditional pre-election big spending vote buying and opted instead to slash funding and bonuses for families, including the baby bonus, to the tune of $5 billion.
Faced with an imposing $60 billion shortfall in revenue over the next four years, the budget confirms billions of spending on the disability insurance scheme and education reforms and stumps up another $24 billion for infrastructure projects.
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Families in the middle income bracket stand to lose some family entitlements as well as promised carbon tax compensation, while incurring new costs for higher education when scholarship grants are converted to loans.
Read more: Government to axe baby bonus in budget
Government is scrapping baby bonus from March 1, 2014, or in nine months and two weeks, and will be replace it with an increase to the rate of Family Tax Benefit Part A. For families not claiming Paid Parental Leave, FTB-A will be increased by $2000 following the birth or adoption of a first child and by $1000 following the birth or adoption of a second or subsequent child. So if you're planning a baby, it's time to get cracking now! Read more about the scrapped baby bonus
The government has slated around $3 billion for new roads and rail which includes $1.8 billion for the WesConnex motorway in Sydney and $715 million for Brisbane’s Cross River Rail project.
Read more: New roads and rails on the books
The government confirmed its flagship DisabilityCare Australia scheme would be funded by a 0.5 percentage point increase on the Medicare levy. There will also be cuts to the Medicare safety net and increased spending on cancer care to the tune of $226 million.
If you are a smoker, the price of a pack of 25 cigarettes will cost you about 7 cents more from 2014. The Government will work out taxes on based on average weekly incomes rather than the Consumer Price Index (CPI). This is to ensure tobacco excise keeps in line with income growth.
Read more: Cancer care big winner in budget
People with disability have been denied the opportunity to live a life many of us take for granted.Tonight, we right this wrong #Budget
— Wayne Swan (@SwannyDPM) May 14, 2013
The budget will slice $2.3 billion from universities to help fund the Gonski education reforms however the government's big ticket plan to boost schools funding will get less than half a billion dollars in its first year.
There is $2.8 billion in extra money allocated to schools over the forward estimates in Tuesday's budget,starting with just $473 million in 2013-14. That means the bulk of the promised money won't be seen until 2017 and 2018.
Read more: Slow start for schools funding boost
Defence & Foreign Affairs
The Gillard government is cutting more than 1200 public service jobs in next year's budget savings some $580 million. Agencies to suffer cuts include the agriculture, broadband, education and environment departments.
Read more: Defence the big winner
The Department of Foreign Affairs and Trade will save $88.4 million over six years from a "temporary reduction" in Canberra-based staff while cuts to foreign aid should save the government around $3 billion.
Govt says #Budget is about "jobs and growth", yet it delivers higher unemployment and lower growth.
— Joe Hockey (@JoeHockey) May 14, 2013