Federal Budget to Post Surplus: A Lesson in Book Cooking
In his speech, Treasurer Wayne Swan said the Federal Government is expected to have a budget surplus of $1.5 billion. Opposition leader Tony Abbott, however, pointed out that with the increased debt ceiling to $300 million, the forecast is off the mark.
Abbott also emphasized that during Swan’s term, he has seen four major deficits in history and taxes and spending have been on the rise.
Abbott, however, lauded the government’s move to give $1 billion to the National Disability Insurance scheme. He added that the government should have pushed for the Productivity Commission to spend $3.9 billion over the next four years.
Finance Minister Penny Wong came to the Budget Committee’s defense. Wong said that based on international standards. Australia’s net debt is negligible. She also added the net debt will peak at 9.6 percent in 2011-2012.
Because of the global financial crisis, the Australian government budget had taken a $150 billion hit. $34 billion, however, was saved to ensure that there is a surplus in 2012-2013 that is seen to grow over the next few years.
Furthermore, the budget surplus will be used to start paying off the net debt.
Wong also said that focus of the government is to work with businesses and to use the revenue to help people in low and middle incomes. According to Treasurer Joe Hockey, this bewilders the business community because earlier on, the government gave its word to use revenue from the new mining tax to cut corporate tax on July 1 by 1 per cent.
This did not materialize, however. The revenue instead shall be used to help the low income families.