Swan still fishing around to find another $10bn
TREASURER Wayne Swan has declared he will need to find another $10 billion in savings over the next two years to fulfil Labor's promise to return the federal budget to surplus.
TREASURER Wayne Swan has declared he will need to find another $10 billion in savings over the next two years to fulfil Labor's promise to return the federal budget to surplus.Amid final preparations for tomorrow week's budget, Mr Swan said yesterday that projected revenue had collapsed by $5 billion for each of the next two financial years.The Age believes that only $2 billion of the $5 billion shortfall is due to weaker-than-expected company tax collections. Another $1 billion is due to weak collections from superannuation funds since a downturn in the sharemarket. A further $750 million is due to weaker-than-expected customs and excise duties on alcohol, tobacco and fuel.Mr Swan, appearing on Channel Ten's Meet the Press, said he would do all within his power "to protect low and middle-income earners", confirming that earners on $300,000 or more would have their superannuation contributions taxed at 30 per cent rather than at the present highly concessional 15 per cent."We have got to make sure superannuation concessions are distributed fairly . . . and in a budget where we are looking for savings, it's important to run your ruler over a whole range of tax expenditures to make sure that they are directed to the right areas," he said.Mr Swan will also tighten so-called living-away-from-home allowances under which executives hired from overseas or interstate receive large tax-free sums to compensate them for "living away from home".From July 1 they will have to prove they rent or own a second home to claim such an allowance and it will be limited to a period of one year. Fly-in fly-out workers in the mining industry will be allowed to continue to claim the allowance.Four leading public health bodies have written to Prime Minister Julia Gillard asking for a crackdown on alcohol tax concessions as a way of stemming the tide of alcohol-related deaths and injuries and saving $1.5 billion a year.The Australian Medical Association, the Cancer Council, the McCusker Centre for Action on Alcohol and Youth and the Foundation for Alcohol Research and Education say taxing wine by volume at the rate applying to beer would save more than $1.5 billion and would stop the leakage of concessions to New Zealand wine makers now claiming them as part of the Closer Economic Relations agreement."We are aware that the government has previously declined to act in this area, arguing that it will not act in the middle of a wine glut and where there is an industry restructure under way," the letter says. "However, research shows the current alcohol taxation arrangements actually contribute to the increased availability of very cheap wine and action is urgently required."Businesses taking part in the Treasury's liaison program report "strong demand" in the resources sector, a "challenging" environment in the retail sector and "difficult" conditions in manufacturing.