Budget 2013: A rough guide to what we already know - Women's Agenda

Budget 2013: A rough guide to what we already know

There are always enough budget leaks in the lead-up to the Federal Budget to get a general idea for just what the country’s political and business journos are finding out while in trawling the papers during the annual budget lock-down.

Thanks to our sister publications Crikey and Smart Company, we’ve listed some of the key numbers to know – as well as the savings and new spending measures likely to be announced – prior to Treasurer Wayne Swan delivering the Federal Budget at dinner time this evening.

Firstly, some of the key numbers:

  • Total budget size: $390 billion
  • Predicted surplus (from the 2012-13 budget papers): $1.8 billion
  • Expected deficit: between $16-17 billion
  • Expected tax writedown in 2012-13: $17 billion
  • Expected tax writedown in 2013-14: more than $20 billion
  • Total shortfall from 2013 to 2016: between $60-80 billion
  • Expected return to surplus: 2016-2017
  • Growth rate: expected to fall to 2.75% from 3%, costing $1.75 billion in lost revenue in 2014-15; growth should average 3% in 2012-13 and 2.5% in 2013-14
  • Inflation: 2.25% in 2012-13 and 2.5% in 2013-14
  • Mining tax revenue: forecast 2012-13 of $2 billion, actual $800 million.

 

So where will the savings come from?

  • $3.3 billion or 0.5 percentage point increase to the Medicare levy for DisabilityCare from July 1, 2013
  • Backflip on measures linked to the Minerals Resource Rent Tax that formed part of last year’s $3.6 billion “spreading the benefits of the boom” package: withdrawal of rate increase in Family Tax Benefit A to come into effect on July 1, saving $1.8 billion (was slated to increase to a maximum of $300 for families with one child, and $600 a year for families with two or more children) — but $1 billion income support supplement for low-income households and the schoolkids bonus and the increase in superannuation guarantee from 9% to 12% by 2020 stays
  • Backflip on tax cuts linked to the carbon tax: axing of $1.4 billion in tax cuts promised last year; a further increase in the tax-free threshold to $19,400 in 2015 from $18,200 in 2012 (although that is triple the previous tax free threshold) because of expectations of 50% declines in carbon tax revenue when the government’s scheme is linked to the floating European carbon price; about $100 million in mooted cuts to clean energy package including renewable energy agency, biodiversity funds, energy efficiency grants and carbon initiatives
  • $580 million over four years in cuts to public service executive branches except for Defence and ASIO (400 jobs)
  • Cuts to foreign aid to save $3 billion (current annual aid budget is $5.2 billion but 7% or $375 million is spent on onshore asylum seeker costs, capped for 2013-14); total aid will increase by $500 million to $5.7 billion or 0.37% of GNI — the 2014-15 Millennium Development Goals for 0.5% of GNI deferred for another year until 2016-17
  • $2.3 billion cut to higher education funding to partly pay for the Gonski reforms.

 

And there’s plenty of spending to come:

  • $68 billion over 10 years for DisabilityCare
  • $26 billion over 10 years for Gonski and school education
  • $3 billion in additional funding for road upgrades: an extra $525 million for Melbourne’s M80 orbital project and blackspots; $718 million for Brisbane’s Gateway; $400 million for Sydney’s F3-M2 link; $1.8 billion for WestConnex (M4 extension and tunnel in Sydney’s inner south-west); $448 million for upgrades to Adelaide’s South Road
  • $100 million for more postgraduate university places; $84.6 million over four years or $97.1 million over five years for extra diploma and masters level places
  • $10 million for a program to protect Australians from asbestos-related disease administered by the Asbestos Safety and Eradication Agency
  • $300 million to increase the amount that can be earned before the dole starts tapering off (allows recipients to earn an extra $38 a fortnight to $100)
  • $55 million for expanded breast cancer screening
  • $19 million for prostate cancer screening
  • $20 million for the Fair Work Commission to tackle anti-bullying.

 

Likely initiatives (we’ll know more about tonight):

  • Dumping of carry-back reforms, currently in bill form before parliament but yet to be passed
  • $2 billion save to tighten thin capitalisation rules and crackdown on “debt dumping” (foreign firms using local debt as a tax deduction)
  • Further tightening of the rules around the Baby Bonus; already $500 million in cuts over four years announced in MYEFO in October (second and third child get $3000 instead of $5000)
  • Mining exploration tax breaks may be tightened
  • Cuts to Medicare and the Medicare Safety Net
  • Cuts to the childcare rebate.

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