Tony Abbott says his government’s first budget will bring ‘‘pain with a purpose’’, as the Coalition government braces for a backlash from voters.
During an interview on Sydney radio on Tuesday, Mr Abbott confirmed for the first time that the budget would include a ‘debt levy’ as well as the reintroduction of indexation on fuel excise, the abolition of the lifetime gold pass – a travel perk available to retired politicians – and incentives to business to employ older workers.
But Mr Abbott’s planned debt tax – a 2 per cent levy on people earning more than $180,000 – may falter in the Senate with the Greens, Palmer United Party and thee Senator-elects stating their intention to block the controversial measure.
Tuesday night’s Budget is expected to contain sweeping cutbacks to welfare payments and will contain unpopular announcements such as large cuts to the public service – about 16,000 jobs are speculated to be in the firing line – a GP fee of between $7 and $15 and a future rise in the pension age to 70.
Laying the blame for the “budget crisis” at the feet of his predecessors, the Rudd and Gillard governments, Mr Abbott conceded that some of the measures would be unpopular with voters, but he believed they were necessary.
‘‘Yes, there’s got to be short-term pain, but it’s pain with a purpose,’’ he told Macquarie Radio.
‘‘This is a problem-solving budget because we do have a very serious problem of debt and deficit, stretching as far as the eye can see.
‘‘But it’s also a nation-building budget.’’
Mr Abbott confirmed there would be $11.5 billion set aside for infrastructure projects, and that profits from the rise in the fuel excise would be directly funnelled to road projects
A scheme to pay businesses a $10,000 incentive bonus to employ workers over age 50 will also be contained in the forward estimates, as the centrepiec of a productivity drive by the government to boost participation of mature age workers.
Treasurer Joe Hockey also defended the budget on Tuesday morning, dismissing questions from journalists in Canberra about ”broken promises”.
“I would say to the Australian people if you’re only looking in the budget for your own interests, then you may be disappointed, but if you’re looking for the national interests you will be cheered. This budget is about shaping the destiny of our nation,” he said.
“Don’t assume there are broken promises. The most significant promise we made was to fix the budget, to build a strong economy and tonight we’re getting on with the job.”
But Opposition Leader Bill Shorten said on Tuesday that the budget would be an “agenda of broken promises and twisted priorities”.
“It is not the job of the Abbott Government’s budget to put pressure on family budgets,” he told reporters in Canberra.
“There’s a new petrol tax, there’s a new doctors’ tax, a GP tax, there’s new taxes on medicines, new taxes on going to the hospital.”
Debt levy
But it is the debt levy that is firmly in the sights of the crossbenchers in the Senate, who, after July 1, will control the balance of power at any time the two major parties find themselves at loggerheads.
Clive Palmer, the eponymous leader of the Palmer United Party, which will control a powerful voting bloc in the Senate, has stated his direct opposition to the debt tax, as well as the rise in the fuel excise, describing both as “draconian” and “totally unnecessary”.
“We wouldn’t support either of those measures because we don’t think it’s justified . . . there’s no debt problem,” he said on Monday.
“Why do you have to hit and hurt other people. Should that be the role of a politician?”
On Monday, the Greens said they would also block the debt tax, leaving the government to wrangle a further six of eight crossbenchers to pass legislation allowing the changes.
As it stands, DLP Senator John Madigan opposes the deficit levy, as does Senators-elect Bob Day, of the Family First Party and Liberal Democrat David Leyonhjelm.
Mr Day told the ABC’s Lateline program on Monday night that he believed the best way for the government to raise more revenue was to lower the tax rate.
“The evidence is in from the around the world that raising taxes does not raise revenue,” he said. “It’s fairly clear that if they want to raise more revenue, then they should lower the tax rate.”
Mr Leyonhjelm said he believed the deficit levy was poor policy.
“It’s an increase in taxes and we don’t like any increase in taxes,” he said. “We think Australia is already taxed too much.”
Mr Abbott made a final pitch for patience and faith from the Australian electorate before Treasurer Joe Hockey delivers the Budget at 7.30pm, saying he would happily be contributing $6500 from his $500,000 annual salary as part of the bevt levy.
“Everyone is going to be in this, and in this together,” he said on Tuesday of the expected horror budget.
“I don’t want a pensioner to look me in the eye and to say I am feeling pain, why aren’t you?”
Mr Hockey also disputed suggestions that a debt tax would slow the economy, saying there would be ”a significant growth package in the budget.”
He challenged Labor to support all the budget measures and appeared to dismiss worries the Greens would block key aspects of the forward estimates.
“It comes down to whether Labor is prepared to put the nation’s best interest ahead of their own interests. The Green’s policy attitudes are up to them.”
Gold travel pass
Mr Abbott confirmed that the lifetime gold pass – a travel perk for MPs allowing free travel for retired politcians and their spouses – was ”gone, kaput, dead forever”.
While the scheme costs taxpayers just $1.27 million a year, it is believed Mr Abbott and Mr Hockey decided to abolish the scheme as keeping it would have made it much harder to sell tough budget measures.
Mr Hockey joined his leader in blaming Labor for “the Budget mess we are in”.
“We can head for a train wreck or we can take the tough decisions to do what is right for the nation. We didn’t create the mess but we did take up the responsibility to fix it,” he said.
Mr Shorten said that the budget was ”bad news for the cost of living for all Australians”.
“Australians are getting up every day working hard, raising families, battling to make ends meet,” he said.
“We see pensioners under attack, we see disability pensioners having to debate whether or not they are legitimate in receiving the pensions they’re getting. It’s not good enough.”
source: smh.com.au
STUDIO 3 NEWCASTLE AUSTRALIA 