PM to announce spending cuts

Prime Minister Julia Gillard will flag funding cuts and hits to the wealthy in order to pay for big ticket items such as the national disability insurance scheme and increased school funding.

In an address to the National Press Club on Wednesday, Ms Gillard will foreshadow her election year plans including "structural savings" to make way for policy priorities that reflect Labor values.

"We will make the tough necessary decisions to ensure our medium term fiscal strategy is delivered and our centrepiece plans for Australian children and Australians with a disability are funded in this new low revenue environment," Ms Gillard will say, according to media reports.

The speech reportedly hints at cuts or axing of accumulated concessions for upper and middle class wealthy voters.

Ms Gillard will declare that increasing Australia's education standards is the "crusade which defines this term of my prime ministership".

"I will put to April's Council of Australian Governments, the critical decisions to implement the national plan for school improvement - quality teaching and learning, power for principals, new transparency on results, future funding arrangements that will meet the needs of every student," she will say.

Opposition Leader Tony Abbott will address the Press Club on Thursday, building on his mini-campaign that kicked off on Sunday.

Shadow treasurer Joe Hockey said when Labor talked about savings it was code for tax increases.

"The bottom line is under Labor, Australians are going to have to pay more because they waste money," Mr Hockey told ABC radio.

Asked if Ms Gillard's speech was addressing the "culture of entitlement" Mr Hockey had railed against in a speech last year, he replied he had been talking about Europe.

"If the prime minister wants to go down the path of increasing taxes on business and consumers, that's going to undermine confidence in the Australian economy," he said.

When Labor speculated about taxes on the rich, "business clams up and you start to see people losing their jobs".

Liberal frontbencher Christopher Pyne said Ms Gillard needed to use Wednesday's speech to "outline a sustainable economic plan for the country".

"Rhetoric, platitudes - people are sick of them," Mr Pyne told ABC radio.

Market Data

  • Currencies
    Currencies
    NamePriceChange% Chg
    0.9334+0.0007+0.07%
    AUDUSD=X
    0.5560+0.0007+0.12%
    AUDGBP=X
    0.6754+0.0002+0.03%
    AUDEUR=X
  • Commodities
    Commodities
    NamePriceChange% Chg