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.