Swan vows billions in school funding despite $18b deficit

FOUNDATIONS to provide freedom to Australians with a disability, revolutionise education funding and boost infrastructure have been laid in the Gillard Government's second budget.

But the long-term initiatives come alongside an $18 billion deficit for the upcoming financial year and cuts to schemes including the Baby Bonus.

The Federal Budget also reveals a $17 billion fall in tax revenue and $43 billion in savings over the forward estimates from cuts and abandoned promises.

It was partly championed on a $24 billion National Building Program, to be rolled out from 2014, which prioritises the Bruce Highway and Ipswich Motorway upgrades, attracting $4.1 billion and $279 million respectively.

The budget also outlines a future call to the private sector to invest in the infrastructure projects.

But funding for the Bruce Highway is not expected to appease the Queensland Government, which has called for an 80-20 funding split and a boost in funding above the base rate.

The Pacific Highway has been allocated no additional funding for the next financial year.

The budget also reveals the Federal Government's plan to scrap the Baby Bonus from 2014 to save $1.1 billion over five years.

Federal Treasurer Wayne Swan said the bonus was better located in the Family Tax Benefit Part A.

"This payment has been increasing dramatically and is not sustainable in its current form," he said.

The government will instead increase the Family Tax Benefit Part A payments by $2000 to be paid in the year following birth or adoption of the first child and $1000 for children after.

The initial payment will be $500, with the remainder paid out over seven fortnightly installments.

Commitments for the National Disability Insurance Scheme, now called Disability Care Australia, and the Gonski education reforms have also been cemented.

Increasing the Medicare Levy from 1.5% to 2% from July 2014 will generate $20.4 billion between 2014-2019 to fuel Disability Care.

Once rolled out in 2019, the scheme will support 460,000 Australians.

The Gonski-inspired National Plan for School Improvement will see $9.8 billion of Federal Government funding over six years from 2014-2015.

The plan, which only NSW has signed up to, centres on needs-based funding with primary school students to be allocated $9271 and secondary school students to see $12,193 from 2014.

The Federal Government has asked state and territories to fund about 35% of the reforms.

The Labor Government has also abandoned its plan to increase the tax-free threshold to ease the burden of the carbon tax.

Australia's carbon price will link to European carbon prices in 2015 through the emissions trading scheme.

But due to what the Gillard Government attributed to a "profound weakness in Europe", it has been forced to delay a plan to increase the tax free threshold until the carbon price reaches $25.40 in 2018-2019.

The tax free threshold had already been tripled to help counter the carbon tax impacts.

Also losing out as a result of the dramatic fall in the carbon price, is the government's climate change initiatives.

The Budget outlines a $247 million funding cut to coal industry assistance, a $662 million reduction in funding for a carbon storage program and the "re-phasing" of $370 million from the Australian Renewable Energy Agency.

Rural and regional communities suffering from doctor shortages are also set to benefit from the Gillard Government's budget with a significant focus on drawing medical professionals further afield.

About $20 million will be taken from Health Workforce Australia, the oversight body for health employment, to bolster the General Practioners Rural Incentives Scheme.

The program will focus on enticing medical practitoners to rural and regional outposts at a cost of $33.8 million from 2013-2014.

The Budget also allocated $55.7 million over four years to enable women aged between 70-74 years old to be eligible for free breast screens every two years.

The Commonwealth estimates increasing the age bracket will lead to an additional 1170 breast cancer detections every two years.

>> Scrapping baby bonus will 'stop so many teenage pregnancies'

>> Analysis: A budget that breaks promises and raises taxes

>> Michelle Grattan: Budget attacks middle class welfare

 

Baby bonus axed, Medicare levy up, but Labor promises surplus, eventually

THE baby bonus will be axed, the Medicare levy will increase, but Labor has promised to deliver a surplus by 2016-17 - if it clings onto office.

Treasurer Wayne Swan will hand down his sixth budget in a chilly Canberra tonight.

Labor is expected to announce  big-spending plans for schools and the disability insurance scheme.

News reports today said the budget will remain in deficit for the two years to 2014-15, before being balanced in 2015-16. It will then return to surplus in 2016-17.

The baby bonus will be scrapped and replaced with an increase in benefits for those eligible for Family Tax Benefit (A).

Eligible parents will receive $2,000 for their first child and $1,000 for each child thereafter.

Labor is expected to announce a national road and rail infrastructure package worth $24 billion over the five years between 2014-15 and 2018-19.

This will be despite a revenue shortfall of around $17 billion this financial year and more than $20 billion the following year

As widely reported, an increase in family tax benefits worth $1.8 billion due in 2015, worth between $300 to $600 a year for families, will be dumped in the budget.

An income tax cut slated for 2015-16 will also be deferred.

Federal Budget 2013:

What else we know:

  • 0.5% increase to the Medicare levy from 2013-14 to pay for NDIS
  • Changes to superannuation, including a 15% tax on earnings over $100,000
  • $2.8 billion in cuts to tertiary education
  • $100 per fortnight increase to the amount unemployed or sole parents can earn without losing benefits. (Cost $258 million over four years)
  • Deferring the 0.5% increase to foreign aid budget by one year, to 2017-18
  • $580 million saving in administration costs in the public service (up to 400 PS job cuts)
  • $55.7 million to expand the breast cancer screening target group to include women aged 70 to 74.
  • $400 million to start F3 to M2 link in Sydney
  • $718 million to fix Gateway Mwy bottlenecks

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