PM Tony Abbott says in a speech at a Sydney Institute dinner that the best way to help families is with job opportunities, not social security payments. Courtesy: APAC

Tony Abbott promised a government of no new taxes and no surprises.

But his government’s first budget, to be delivered on May 13, risks breaking both key election commitments.

The prime minister insists the proposed “deficit levy” on people earning $80,000 or more, which could remain in place for up to four years, is not a broken promise.

“If there was a permanent increase in taxation that would certainly be inconsistent with what was said during the election,” he said.

Abbott argues that bringing the budget back to surplus within the decade demands short-term pain for permanent and lasting gain. While the idea of a tax hike on the highest income earners has found some support in the welfare sector, Labor leader Bill Shorten has seized on it as a “deceit tax”.

“It is clear to most reasonable Australians that the Abbott government said one thing in opposition and is now doing something else in government,” he said.

Business groups have been quick to remind Abbott and Treasurer Joe Hockey of a line both men have used frequently: “You can’t tax your way to prosperity.” Income tax rises have a habit of dampening private sector demand, especially at a time when the economy needs a kickalong and the jobless rate is unimpressive.

It’s not as if there are no other options to get the budget under control.

The $5.5 billion paid parental leave scheme is widely seen, even within coalition ranks, as a gold-plated scheme the nation can’t afford at present.

Labor points to the unnecessary $8.8 billion given to the Reserve Bank to bolster its holdings and other post-election spending which has effectively doubled the deficit.

The Greens suggest trimming some of the billions of dollars in diesel fuel subsidies given to foreign-owned mining companies or a modest levy on bank profits.

Then there are the bigger and bolder options of broadening the base or raising the rate of the GST, winding back capital gains tax concessions or axing generous tax breaks for the highest earning superannuants.

However, Abbott has made a rod for the government’s own back by promising before the election not to touch super or the GST. Thursday’s release of the national commission of audit report will help Abbott underline the severity of the economic and fiscal challenge ahead.

It may also give the government some political cover as Hockey and Abbott reject some of the audit report’s more extreme measures to deal with debt and deficit, as John Howard did after his audit in 1997.

As a sweetener, the prime minister, in a speech on Monday, held out hope of income tax cuts within five years if the budget-repaid job goes to plan.

But the coalition has much explaining to do if it wants to avoid the “broken promises” hole into which the former Rudd and Gillard Labor government collapsed.

AUSSIE TAXPAYERS WILL ‘SHARE BURDEN’ OF BUDGET DEFECIT

TAXPAYERS will be slugged with a debt levy taking an extra $800 a year from someone earning $80,000.

One in five people in NSW earn $78,000 or more a year.

And Joe Hockey’s “sharing the pain’’ deficit levy will be tiered so that higher income earners will pay significantly more than other taxpayers.

The new tax to be imposed in the Treasurer’s first Budget on May 13, will be a levy on taxable income — similar to the Medicare surcharge.

The debt levy news comes as the Prime Minister flagged that school leavers will be ­denied easy access to the dole and would be forced to study or work under a budget ­welfare crackdown.

In a speech to the Sydney Institute in Sydney, Tony ­Abbott also confirmed aged-pension thresholds would be tightened, indexation scaled backand a Medicare co-­payment imposed.

NO FREE RIDES AS PM SIGNALS WIDESPREAD WELFARE CRACKDOWNS

TONY ABBOTT: BUDGET PAIN WILL BE AUSTRALIA’S GAIN

WE’LL BE FAIR IN A TOUGH MAY BUDGET, SAYS ABBOTT

The debt levy will only apply to workers on incomes of $80,000 and above and the rates will increase in line with tax brackets.

Taxpayers in the 37c tax bracket — on incomes of $80,000 to $180,000 — are likely to pay an extra 1 per cent.

Those earning above $180,000 are likely to pay an extra 2 per cent.

Like the Gillard government’s flood levy, the debt tax will also be temporary, applying only while the budget is in deficit. Under the new levy someone earning $150,000 will pay an extra $1500 a year.

A worker on $200,000 will be slugged an extra $4000 a year, while a taxpayer earning $400,000 will pay $8000 in extra tax.

News_Image_File: Prime Minister Tony Abbott / Picture: Gary Ramage

The Daily Telegraph understands the budget will reveal for the first time that the deficit inherited from the Rudd government was going to still be $30 billion in 2017-18.

But with tough measures to cut spending and this tax levy, Mr Hockey will predict the deficit will be largely ­eliminated by then. This means the levy should apply only for four years.

The legislation will have a sunset clause, terminating it after the 2017-18 year.

The deficit levy shows that the government is deadly ­serious about swiftly fixing the deficit and sharing the pain of doing so.

The release on Thursday of the Commission of Audit’s report will show the size and seriousness of the budget deficit position.

The budget will show that to do nothing would mean deficits adding to at least $160 billion over the next five years (including the current 2013-14 year) — coming on top of the $190 billion of deficits in the first five years of the Rudd-Gillard governments.

The government has signalled a number of belt-tightening measures on the spending side of the budget. They include savage cuts to the public service and the $6 GP co-payment. The deficit levy is designed to ensure the cost of fixing the deficit does not fall only on people in need of budget assistance and that a major contribution will be made by those earning taxable incomes; with the highest earners making the biggest contributions.

On top of that, the vast majority of taxpayers pay the Medicare levy of 1.5 per cent of their taxable income. And the Gillard government upped the Medicare levy by 0.5 per.

SEARCH FOR MISSING FLIGHT MH370 TO TOP $60 MILLION Patrick Lion

THE search for Malaysia Airlines flight MH370 could be the most expensive in history.

The Abbott government has embarked on a new underwater-focused search set to cost $60 million.

Describing it as “probably the most difficult search in human history”, Prime Minister Tony Abbott revealed yesterday that air patrols of the West Australian search area would stop — apart from a single flight on standby — and be replaced by an intensified underwater search.

After 52 days with no trace of the Boeing 777 and the 239 people aboard, the search cost now dwarfs the two-year effort to find the Air France flight that vanished over the Atlantic Ocean in 2009. That search cost about $50 million.

The new search, with sidescan sonar equipment similar to that used to find the Titanic, will be outsourced to commercial operators for about $60 million. It will examine a possible impact zone of 700km by 80km.

“The aircraft cannot disappear — it must be somewhere,’’ Mr Abbott said.

News_Image_File: Tony Abbott and search co-ordinator Angus Houston / Picture: Gary Ramage