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May 14th, 2013 
Federal Treasurer Wayne Swan (R) will deliver his sixth budget in Canberra on Tuesday.
Source: AAP
LABOR will take the axe to middle-class welfare and crack down on corporate tax breaks in a bid to secure long-term funding for schools and disability care.
But the coalition says Treasurer Wayne Swan’s promise of big spending and balancing the budget within two years is unbelievable and 60 per cent of the “savings” are new or increased taxes.
Mr Swan’s sixth budget, handed down in Canberra on Tuesday, projects a deficit of $19.4 billion for this financial year, followed by a shortfall of $18 billion in 2013/14.
He blamed challenging global conditions, lower business profits and the high Australian dollar for a “savage” $60 billion hit to tax receipts over four years while trumpeting $43 billion worth of savings.
“We have a choice – you can decide to cut to the bone or have a more gradual pathway back to surplus,” Mr Swan said.
The government will delay the return to surplus to support jobs and growth, pay for the multi-billion dollar national disability care scheme and schools funding programs ahead of the federal election in four months.
Labor’s big spending includes $14.3 billion for DisabilityCare Australia, which by 2018/19 will support 460,000 people with severe and permanent disabilities and draw some of its funds from Medicare levy rise to two per cent.
There will also be $9.8 billion for new school funding, $24 billion extra for road and rail projects over 10 years, while health funding will rise to a record $64.6 billion despite some tinkering with Medicare to save $1.7 billion.
Labor wants to push the budget to a slim surplus of $800 million in 2015/16 and deliver a $6.6 billion in surplus the following year.
Among the savings is a $2.4 billion plan to axe the baby bonus from March 1 next year and replace it with a $2000 Family Benefit Part A payment for the first child, or $1000 for the second or subsequent child.
A crackdown on company tax loopholes will reap $4.2 billion.
Other initiatives include allowing Newstart recipients to earn more than $1000 more a year and a pilot program to allow pensioners to downsize their home without losing money.
Smokers will cough up an extra seven cents a pack from early 2014 and face steeper automatic rises in coming years.
Shadow treasurer Joe Hockey said while the budget was described as being about “jobs and growth” it actually projected a worse jobless figure (5.75 per cent) and lower growth (2.75 per cent).
Mr Hockey did not commit to keeping any of the cuts and dismissed Mr Swans’ surplus forecasts, arguing the deficit challenge was “substantially larger”.
Key Independent MP Tony Windsor said while he was uncomfortable with some measures – such as cuts to university funding and foreign aid – voters had to be realistic.
“You can’t just keep demanding more without paying more and it’s got to be sustainable long term,” he said.
Australian Chamber of Commerce and Industry chief Peter Anderson said the government’s problem was not revenues, which were expected to rise by $25 billion over the next four years, but failing to boost productivity and competitiveness.
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