Swan's cash splash
Families will benefit from the axing of promised company tax cuts.
Families will benefit from the axing of promised company tax cuts. AUSTRALIANS on low and middle incomes have won billions of dollars in handouts to buttress them against cost-of-living pressures, including the carbon price, after the Gillard government provocatively cancelled its promised company tax cuts.In a budget that redirects mining boom largesse from corporate Australia on the eve of the introduction of the carbon tax, the biggest winners are families and people on welfare.Treasurer Wayne Swan told Parliament last night: ''For too many Australians, this feels like someone else's mining boom - someone else's prosperity. So tonight we announce new policies to spread the benefits of this boom''.But the government will face criticism from business over the axing of the proposed cut in company tax from 30? to 29?.Mr Swan's fifth budget, heavy on ''Labor values'' and delivering on reforms such as disability insurance, is carefully crafted to try to win back disaffected ''battlers'', despite making a net $17 billion in savings.A $1.5 billion surplus for 2012-13 is promised to rise in the following three years, reaching $7.5 billion in 2015-16. The deficit for the current financial year is expected to be a massive $44 billion, due to the revenue trough that has followed the global financial crisis.But Mr Swan declared: ''The deficit years of the global recession are behind us. The surplus years are here.''The budget papers predict that unemployment will be around 5.5 per cent in the next two years - it is currently 5.2 per cent - while economic growth will be 3.25 per cent in 2012-13 and 3 per cent in 2013-14.''This budget is about discipline and restraint but also about priorities, ensuring precious funds are redirected to the purposes and people that need them most,'' Mr Swan said.He said the budget made room for $5 billion in new payments to households, and an extra $714 million for tax breaks to small businesses incurring losses.In the ''Spreading the Benefits of the Boom'' package, more than 1.5 million families will get an increase in family tax benefit A, with almost half receiving an extra $600 a year. The cost will be $1.8 billion over the budget period.An extra $2.1 billion will be spent over five years on a means-tested Schoolkids Bonus. All eligible families will receive a lump-sum payment next month, then $820 for secondary students and $410 for primary students next year.A new supplementary allowance for the unemployed, students and parents with young children on income support will start in March, at a cost of $1.1 billion.Mr Swan said the measures would help low and middle-income families ''make ends meet and get ahead''.The budget cuts are at the expense especially of high-income earners, whose tax breaks for superannuation, golden handshakes and living-away-from-home benefits have been slashed.Foreign aid has suffered, with the government delaying its target by a year, saving nearly $3 billion. Defence has delivered more than $5 billion in cuts, with projects delayed.Family tax benefit A will be more tightly targeted, limited to children under 18 or in secondary school.The Treasurer, defending the cancellation of company tax cuts that faced defeat in Parliament, said: ''We wanted to do more for business ? but the opposition's negative tactics have prevented that tax cut flowing''.On Labor's reform agenda, the budget commits $1 billion over four years to the first stage of the disability insurance scheme, which is expected to cover 10,000 people from 2013-14 and 20,000 from 2014-15.Another $515 million will go to dental care, in a blitz on waiting lists for public care.Shadow treasurer Joe Hockey labelled it a "cook the books" budget, with the forecast surplus in 2012-13 based on what he called ''fiddled figures''. Rejecting the school bonus, he said: ''We are not going to support the cash handout to people before the end of the financial year ? It is a cash bribe for the carbon tax.''The government needs to rush the school bonus legislation through Parliament this week so it can pay the money on time.The Australian Chamber of Commerce and Industry said the budget was ''strong in its ambition to repair government finances, limited in its support for the economy and spoilt by its intention to proceed with the carbon tax and failure to deliver the promised company tax cut''.The Business Council of Australia said the budget had taken steps to strengthen the economy and fiscal foundation, but had not set a fully clear direction to build business and community confidence. The council said it would continue to pursue the company tax cut through the government's business tax working group.The Australian Industry Group said scrapping the cut in company tax was a ''major blow to business'' that would reduce the incentive to invest and innovate.Independents Rob Oakeshott and Tony Windsor criticised the deferral of foreign aid, but said they probably would not try to block any elements of the budget.Greens leader Christine Milne said: "It is great news that the Greens have helped stop the big business tax cuts, but we'd prefer to see this revenue spent on supporting the most vulnerable people and to drive systemic change and funding of services.''ACTU chief Ged Kearney said the budget would help make Australia fairer "through a more progressive tax system, better assistance for low and middle-income earners and protection for jobs in struggling businesses''.World Vision head Tim Costello said the broken promise on foreign aid would ''raise eyebrows'' around the world.
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