Australian Prime Minister Julia Gillard watches as her Treasurer Wayne Swan delivers his budget speech to the House of Representatives in Canberra yesterday.
CANBERRA: Australian Treasurer Wayne Swan made a values pitch to voters yesterday as he unveiled an A$43bn ($43bn) austerity drive in a budget without election-year trimmings.
Swan, delivering his final budget before his Labor party seeks a third term on September 14, emphasised big-ticket reforms to education and disability care and argued for “consistency” at the helm as he revealed an A$18bn deficit for 2013/14.
A major fall in revenues also saw growth forecasts slashed for 2013/14 from 3 percent to 2.75 percent and unemployment scaled up from 5.5 to 5.75 percent.
A surplus initially due this year is now set for 2016/17 due to economic turbulence, including a fall in commodities prices due to China’s slowdown and the rising Australian dollar.
Despite this, ratings agency Standard & Poor’s affirmed Australia’s AAA rating with a stable outlook, saying “the government continues to demonstrate a commitment to prudent fiscal policy”.
Swan rejected suggestions he was taking a gamble by asking Australians to put the national interest before self-interest in an election year, when Labour appears on track for a landslide defeat.
“We haven’t approached the budget from the perspective of opinion polls, we’ve approached it from the perspective of doing what is right for the nation,” he told reporters.
He described Labour’s spending priorities as “some of the most important reforms our country will undertake in a generation”.
“There is something big in this for Australia and there’s something big in this for every Australian family,” Swan said.
To find A$25bn to fund initiatives in education and disability, Labour launched an A$43bn savings drive over five years, including deferral of A$1.9bn in foreign aid and tax rises worth A$11.6bn.
It also scrapped or delayed a number of family benefits including a popular “baby bonus” incentive payment for having children.
Swan acknowledged there would be “some people who will be unhappy about this decision” but said the government had decided others areas needed the funds.
Shadow treasurer Joe Hockey called the budget “debt, chaos and spin” and said he did not believe the figures on the deficit.
“I think the deficit challenge is substantially larger,” he said. AFP
