Australian Labor government on Tuesday night unveiled its 2013-14 budget, conceding that a long promised budget surplus would only return in three years.
Deputy Prime Minister and Treasurer Wayne Swan delivered the budget speech at the House of Representatives, saying that the budget deficit is estimated to be of 19.4 billion Australian dollars (19.4 billion U.S. dollars) in year 2012-13 and is expected to be lowered slightly to 18 billion dollars in year 2013- 14.
The country would only regain budget balance in 2015-16 and achieve a surplus of 6.6 billion dollars in 2016-17.
The government has decided to delay the return to surplus so it can support jobs and growth. "Just because the global economy took an axe to our budget does not mean we should take an axe to our economy," Swan said. Swan blamed the volatile global economy, a stubbornly high Australian dollar and lower commodity price for a "savage" 60- billion-AU-dollar hit to tax receipts, which makes the promised surplus impossible in 2012-13.
During his speech, Swan outlined the plan for 43 billion AU dollars worth of savings, including a 2.4-billion-AU-dollar plan to axe the baby bonus from March 1 next year and replace it with a 2,000-AU-dollar Family Benefit Part A payment for the first child, or 1,000 AU dollars for the second or subsequent child, which will cut out for those on household incomes above 110,000 AU dollars, while a crackdown on company tax loopholes will reap 4.2 billion AU dollars.
Other initiatives include allowing Newstart recipients to earn more than 1,000 AU dollars more a year and a pilot program to allow pensioners to downsize their home without losing money.
Smokers will have to pay an extra 7 cents a pack from early 2014, and pay more in coming years as excise and duties are linked to incomes not the consumer price index.
Meanwhile, Labor also aims at big spending includes 14.3 billion AU dollars for DisabilityCare Australia, which by 2018/19 will support 460,000 people with severe and permanent disabilities, and part funded by a rise in Medicare levy from 1.5 percent to 2 percent.
There will also be 9.8 billion AU dollars for new school funding over six years and 24 billion AU dollars extra for road and rail projects over 10 years.
Swan also predicted the unemployment rate to stabilize at 5.75 percent in 2013-14, while the economy is expected to grow by 2.75 percent.
This will likely be the Treasurer's last budget if current polling is to be believed as Australia faces a general election on Sept. 14, which opinion polls suggests Labor could lose.