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.

SMSF’s Members Association Chairman Grant Abbott observes that this change can make rates go up and down at any time. For instance, it may be set among contributors with $300,000 annual income this year but it may very well drop down to $180,000 next year which is where the highest marginal tax rate kicks in.

There are also talks that Finance Minister Penny Wong and Treasurer Wayne Swan are pushing for the rate to start at $200,000 because the government is eyeing the retirement funds to help with the budget. Using the superannuation contributions system has long been one of the most effective tax strategies for the rich, which can effectively cut their tax rate by more than 30%.

The parliament will sit down come May 8 for Swans much anticipated budget, where no one is expected to escape the pinch. Industry observers noted that there might be a few surprises left come budget time. Andrew Moir, private wealth head of Evans & Partners, said that given the rumors circulating, it won’t be a surprise if something comes up during the deliberation. 

The question now is if a new adjustment in the system can help the government deliver the $1 billion it needs and if super’s tax environment will remain simple and safe for investors. The introduction of the much derided super contributions tax surcharge was regretted by former treasurer Peter Costello because of it’s difficulty to implement. It appears that Wayne Swan’s alignment of superannuation contribution benefit with taxable income will create a whole new headache for the Australian Taxation Office.

This is what Nationals Senator Barnaby Joyce is encouraging Tony Abbott to do if he wins the elections. According to Joyce, the plan targets stay-at-home mums and can be considered their own version of superannuation.

The Senator said that women make a great sacrifice by staying at home and to ensure that their families stay afloat despite hard economic times.

Earlier last month, the Coalition proposed a paid parental leave plan, which would give working women as much as $75,000. The plan has been met with skepticism and criticism, saying this would mainly benefit wealthy women.

In an attempt to balance public sentiment, it is pushing for a plan that, this time, would benefit stay-at-home mothers.

Finance Minister Penny Wong, however, said the proposed scheme would cost up to $3 billion in the next three years.

Wong said this is a proposal that the Coalition clearly cannot afford. She added the Coalition would need to identify where to get the money to fund these proposals.

The sentiment is echoed by Andrew Robb, saying that promises of the Coalition would still depend on the budget. Robb is Abbott’s finance spokesman.

Warren Truss, Nationals head, clarified that the double baby bonus scheme was a proposal of Nationals and not the Coalition. Truss added that Abbott does not endorse it.

The paid parental leave policy was also not an issue about welfare. Instead, it was aimed at encouraging married women to remain in the workplace.