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Jeremy Thompson, ABC Online:
Swan makes jobs his budget mantra
By Jeremy Thompson
Treasurer Wayne Swan brought down his fourth federal budget in Canberra tonight, delivering few surprises as he branded it a “jobs, jobs, jobs” plan designed to create a “bigger and better workforce”.
In line with his oft-repeated “back-to-work-budget” mantra, much of the document deals with employment participation and how to get the unemployed back into work in a patchwork economy.
There are new programs in health, money for regional Australia, tax write-offs for small business and programs to encourage low-income families to better educate their children.
As expected, the biggest spending initiative is in mental health, with an extra $1.5 billion over five years to bring the total spend to $2.2 billion.
To help pay for the measure, the Medicare rebate for GP mental health plans will be cut and the number of Medicare-funded psychologist visits reduced, saving $300 million.
More savings will be made partly through reform of the car fringe benefits tax, deferring promised indexation of family payments and family tax benefits, deferring defence capital and workforce spending, and demanding the public service work more efficiently.
The major initiatives are:
•new $1.5b program to address mental illness
•$360m National Workforce Development fund to deliver 130,000 training places
•$425m in bonuses for excellence in teaching
•up to $4,200 in new support for low-income families with teenagers still at school or in training
•$200m for more school facilities and programs for disabled students
•$222m to expand school chaplaincy program to 1,000 more schools
•$1.8b for regional health services
•16,000 skilled migrants allocated to regions to take advantage of mining boom
•low-paid workers to have tax offset paid during year rather than at tax time
In all, the Government has flagged new spending of more than $9 billion and savings of $22 billion.
The deficit this year is $49.4 billion – up nearly $10 billion on the previous estimate – and will fall to $22.6 billion next year, up from the estimated $12 billion.
As expected, the Government promises to have the budget back in the black in 2012-13, forecasting a modest surplus of $3.5 billion.
• Business Spectator analysis HERE:
Lindsay Tanner, come back! All is forgiven.
The former finance minister would have been embarrassed by this budget: despite all the stern prime ministerial repetition, it is not tough. Revenue forecasts made just six months ago have proved to be way too high, yet spending has gone on regardless. What’s more, the optimistic forecasts remain just as optimistic.
Any decent CFO would be embarrassed by this budget. There has been an $8 billion blow-out in this year’s deficit since the Mid Year Economic and Fiscal Review last November, and a $10 billion blowout in next year’s deficit.
The return to surplus the year after, requiring a $26 billion turnaround in the bottom line in 12 months, is simply based on ignoring what’s happened and plugging in the same economic parameters for 2012-13 as before.
It’s certainly not based on any savings measures by the government, despite all the spin to the contrary. The net effect of decisions made since last November on this year’s budget plus the budgets of the next two years is actually minus $2.5 billion. That’s right: decisions by Julia Gillard and Wayne Swan are worsening the budget position, not improving it.
The supposed fiscal centrepiece of today’s budget is savings of $22 billion, mentioned several times in the Treasurer’s speech and many times in the Budget Papers. Actually it’s $21.7 billion, over four years, offset by $18.9 billion in new spending. Net savings: $2.8 billion. And the savings are mostly on the political never-never – back-ended to after the next election.
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