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May 15th, 2013 
Peter Nolan
Updated
Gillard defends budget deficit
Julia Gillard says voters will deliver their verdict on the budget at the September federal election.
The Government has begun the hard sell for its election-year budget, defending its decision to axe the baby bonus and fending off Opposition criticism that the budget is “fundamentally dishonest”.
Prime Minister Julia Gillard says this budget has made “wise investments” for the future, by setting out long-range funding for the Gonski education plans and the National Disability Insurance Scheme.
She says the Government made a “values judgement” by deciding to scrap the $5,000 baby bonus and spend the $1.1 billion saved on schools instead.
“I don’t worry about the newspaper headlines … I worry about making the right choices for the nation,” Ms Gillard told AM.
“We are prepared to be judged by that.
“I want our nation to have better schools and every child to have a better education; I want us to support people with disabilities.
“We’ve made the choices to do that and people can judge that.”
The Opposition will not reveal if it intends to support the cut, but its treasury spokesman Joe Hockey has been reported as being in favour of winding back the baby bonus.
“We will consider it carefully,” Mr Hockey told ABC Radio National.
“I hope you can understand our caution in just having a knee-jerk reaction to every single initiative that was announced a few hours ago.”
Opposition Leader Tony Abbott says there will be more announcements from the Coalition in his Budget-in-Reply speech, which will be delivered to Parliament on Thursday night.
But the bulk of the Opposition’s costings will not be released until after the Pre-Election Fiscal Outlook (PEFO) is released up to ten days into the election campaign.
“We will be making further announcements of significant savings in the weeks and months ahead,” Mr Abbott said.
“We will only finalise the full fiscal position after the PEFO statement, because we don’t know the true state of the books until then,” he said.
Mr Hockey says the state of the books outlined in Treasurer Wayne Swan’s sixth budget cannot be trusted and that the Government’s claims about the multi-billion dollar revenue writedowns are “codswallop”.
“I think the budget is fundamentally dishonest,” he said.
“I think there are a number of aspects of the budget that make a joke of Wayne Swan’s claim to deliver a surplus.
“I do not accept their claims that they’re writing down revenue, that is the biggest load of spin and codswallop I have ever heard.
“They’re writing them down off their overly optimistic assumptions and then claiming the world is coming to an end.”
The budget shows $17 billion has been wiped off the nation’s books this financial year, and a $60 billion write-down over the forward estimates.
Mr Swan stands by the figures.
“The fact is that it has not grown as fast – the revenue head, as it should have grown, and as was forecast, and as it has in the past,” he said.
“For [Joe Hockey] to come in and glibly put those figures forward shows that he doesn’t understand how to run a modern economy.”
He says the Government has made a “responsible” choice to return to surplus.
“We had a choice to make in the face of that revenue writedown – you could go out and slash and burn that’s what the Liberals would do – cut to the bone,” he said.
“We took the choice to support jobs and growth and come back to surplus on a more gradual path.”
One of the main cuts is the move to scrap the baby bonus, which was introduced by the Howard government and has been widely criticised as “middle-class welfare”.
It will be axed from March 1, 2014 – saving the budget $1.1 billion over five years.
The Government has instead moved to increase family payments (Family Tax Benefit Schedule A) for eligible families when they have a new baby, but according to Government modelling, it will leave about 28,000 stay-at-home mothers who do not qualify for family payments without government support.
The increased payments for FTB-A will be $2,000 for the first child and an additional $1,000 for subsequent children.
Budget receives cool response from business
The budget has received a cool reception from business groups, with most lamenting the lack of assistance for firms and tax changes that will hit large multinational companies.
Topics:
budget,
government-and-politics,
australia
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Source Article from http://www.abc.net.au/news/2013-05-15/government-defends-decision-to-axe-baby-bonus/4690666
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