Highlights of Wayne Swan’s Budget 2012-13



$1.5 billion surplus for 2012-13, growing to $7.5 billion in 2015-16.

Budget deficit for the year ending June 2012 blows out to $44.4 billion.

Government has found $33.6 billion in savings, offset by $5 billion in new spending.

"Benefits of the Boom": new payments for families to offset cost of living pressures.

National Disability Insurance Scheme begins.

Commitment to aged care reforms.

Mining boom means economy will keep growing, despite spending cuts and carbon tax.

The Economy in 2013

Unemployment remains low: forecast to peak at 5.5 per cent.

GDP at 3.25 per cent next year, 3 per cent in 2014.

Inflation moderate: 3.25 per cent next year, 2.5 per cent 2014-15.

Mining boom continues apace: $450 billion in the pipeline. "Patch-work economy is multi-faceted": not all non-mining sectors are struggling, spill-overs from mining in-direct as well as direct.

Australia is the envy of the rich world: Australian GDP growing robustly while Europe, Japan and the US face a lost decade.

"Why returning the budget to surplus is appropriate"

The stimulus worked: the "timely, targeted and temporary" stimulus during the GFC supported economic growth and averted a deep recession.

Even so, the government "charted a clear path to return the budget to surplus" when growth returned to trend.

Growth is not "around trend", so a roughly balanced-budget is appropriate.

Surplus will provide confidence, not just to consumers, but to financial markets.

Australia retains AAA credit rating, bind rates very low.

Net debt will peak at less than 10 per cent of GDP, one-tenth of many OECD partners.

How Swan got back to surplus

$33.6 billion in savings, a part of over $100 billion in savings identified in the four budgets since 2008-09.

Government spending is only 23.5 per cent of GDP, a level not seen since 1993.

Some "smoke and mirrors": spending moved forward to 2011-12.

Tax receipts gradually returning to pre-GFC levels, but still lower than expected.

What are the spending cuts?

Big-ticket spending cuts include:

Cuts to overseas aid: $2.9 billion in savings over four years by deferring its aid target of reaching 0.5 per cent of Gross National Income by a year. Includes a $212.5 million cut to AusAID. Government points out aid budget will still double between 2007-08 and 2014-15.

Defence cuts: $5.45 billion over the forward estimates. 1000 civilian staff to be cut, purchase of 12 F-35 Joint Strike Fighters to be delayed, purchase of self-propelled howitzers cancelled, retirement of the C130H Hercules brought forward.

Single parents: Parenting Payment will cease once a child turns eight for single parents, or six for partnered parents. Saves $685 million over four years.

New revenue measures, including cancelled tax cuts

Company tax cut from 30 per cent to 29 per cent abandoned. Saves $4.75 billion over the forward estimates.

Crackdown on GST under-reporting: saves $986.2 million over the forward estimate.

The 2010-11 income tax "simplification" measures abandoned, including the so-called "standard deduction" for ordinary taxpayers. Saves $2.094 billion over the forward estimates.

Superannuation tax breaks tightened, including deferring the 2010 budget measure that gave a superannuation concession to workers with super balances under $500,000. They no longer get a special tax break on their super top-ups. Saves $1.46 billion over the forward estimates.

Tax break for super contributions for very high earners (over $300,000) tightened: saves $946 million over the forward estimates.

50 per cent tax discount for interest income abandoned. Saves $923.5 million over the forward estimates.

Tax breaks for Green Buildings killed off: saves $405 million over the forward estimates.

Personal income tax cut for mature age workers cancelled: saves $255 million over the forward estimates.

Limit eligibility for Family Tax Benefit A to children turning 18. Saves $360.9 million over four years.

Raise HECS rate for maths and science university students. Saves $314.9 million over four years.

Increase in the Road User Charge. Brings in $698 million over four years.

Fringe Benefits Tax tweaks for second home allowance. Saves $1 billion over the forward estimates.

Decrease in duty-free exemptions: saves $600 million over the forward estimate.

New spending announcements

"Benefits of the Boom"

$2.1 billion over five years for a new "school kids bonus": $410 and $820 for each primary and secondary student. Not means-tested: "all eligible families will receive the full rate of payment."

Benefits of the Boom: new income support payment for those on most benefits like Newstart, Youth Allowance and Parenting Payment. $210 per year extra for eligible singles and $175 for each member of an eligible couple. Costs $1.1 billion over four years.

$1.8 billion over four years to increase the payment rate of Family Tax Benefit A. Those on full rate with one child will get $300 extra a year, those on base rate $100.

National Disability Insurance Scheme

$1 billion over four years for the first stage of the National Disability Insurance Scheme.

Health and dental care:

$345.9 million over three years to alleviate pressure on public dental waiting lists, and $158.6 million over four years to increase the capacity of the dental workforce (but offset by $290 million in savings from re-allocating existing dental funding).

$475.0 million over six years for the delivery of 76 projects through the Health and Hospitals Fund (HHF) 2011 Regional Priority Round.

$233.7 million over three years to implement the National e-Health Program.

Aged care

Aged care announcements ("Living Longer, Living Better"): $1.2 billion over five years from 2012-13 (including $471.7 million in 2016-17) to address workforce pressures in aged care.

$660.3 million over five years from 2012-13 in residential care.

$955.4 million over five years to assist older Australians in need of care to stay at home.

$80.2 million over five years from 2012-13 for better health links to aged care providers.

$256.4 million over five years from 2012-13 for aged care reform priorities such as the My Aged Care website and the Aged Care Quality Agency.

$192 million over five years from 2012-13 for skills development in aged care workforce.

But there will be aged-care savings to offset this funding including $561 million over five years owing to means-testing.

Afghanistan

$1.3 billion in new spending for next year’s operations, including $374.9 million over four years for a Force Transition Team to redeploy from Uruzgan to Kabul.

$286 million over two years for civilian and police aid in Afghanistan

Remote jobs and the Northern Territory

Remote jobs investment: $393 million in new spending for Remote Jobs and Communities Program, $137.5 million for a Community Development Fund.

Northern Territory spending: $141.6 million over four years ($326.3 million over 10 years) for the Alice Springs Transformation Plan, $239.6 million over four years for better policing and justice in the NT, $254.4 million over four years NT health and allied health.

G20

$326.9 million over four years to host the G20 in 2014.

Arts, culture and media

$95 million in extra money for SBS. The extra funding "will allow the SBS to maintain the quality and delivery of existing services and upgrade distribution and storage technology". Also $63 million for a free-to-Air Indigenous television service.

$12.8 million for new Wolverine movie

$39.3 million for national cultural museums

National Cultural Policy: no funding