Australia prepares for Budget 09

TONIGHT’S Federal Budget will be about three things – jobs, nation building and a path back to surplus.

That was the message from Treasurer Wayne Swan this morning as he again repeated the Government’s mantra that there would be “difficult decisions” and “no easy answers”.

Just hours from delivering a in Budget ravaged by a $200 billion writedown revenue, Mr Swan said he was working in the “most difficult set of circumstances in 75 years”.

But he dodged questions about the likely impact on Labor in the polls, saying: “What we have to do is the right thing in the nation’s long-term economic interests”.

Wealthy retirees emerged as the latest group to pay the price for that stance today.

The Daily Telegraph reported they could have their pensions cut to help fund a $30-a week increase for almost one million single age pensioners.

The Government is expected to tighten the taper rate on the age pension, a method by which it claws back the welfare payment from retirees with an independent income.

It is just one of a number of cutbacks the Government is expected to outline as it tries to rein in an expected almost $60 billion Budget deficit.

The 30 per cent tax rebate for private health insurance coverage will be means tested, payouts for obstetric and IVF services under the Medicare Safety Net will be cut back and the increase in the first-home owners grant will be wound back.

Wealthy Australians will have their tax break on superannuation contributions cut in half and government superannuation co-contributions for low income earners will be slashed from $1500 to $1000 a year.

The “sin taxes” on alcohol and cigarettes could be increased.

But the Budget will announce an 18-week paid maternity leave scheme.

And it is expected to include a big-spending jobs package to combat an expected increase in unemployment to 8.5 per cent as a result of the global financial crisis.

The Opposition said the Budget cutbacks were made necessary by the Government’s irresponsible big-spending stimulus packages in response to the global financial crisis.

The $30-a-week rise in the pension will go only to single age pensioners and will see the weekly pension rate rise from $284.90 to $315 a week.

It will answer criticism that the payment left in poverty those who relied solely on the pension.

The rise is also expected to be extended to single veterans and disability pensioners but will not go to single mothers.

The pension rise will cost more than $3 billion, and to help pay for it, the Government is expected to tighten means testing of pensions.

Currently, single pensioners can earn up to $41,000 and still receive a small pension payment.

They also qualify for a range of concessions on medicines, council rates, electricity bills and telephone allowances worth up to $10,000 a year.

Couples can earn up to $68,000 and still get access to these valuable concessions.

http://www.news.com.au

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First Home Owner Grants

A NATIONAL affordable housing organisation has called on the Federal Government to scrap its first-homeowner grant.

The grant, which was raised from $7000 to $14,000 for existing dwellings and from $14,000 to $21,000 for new homes as part of Labour’s $10.4 billion stimulus package last year, is due to expire on June 30.

The National Shelter has called on Treasurer Wayne Swan to axe the scheme when he hands down his second budget tomorrow, saying it inflates housing prices beyond the value of the grant.

“We’d be in favour of getting rid of all of it,” chief executive Adrian Pisarski told ABC Radio today, adding if the scheme was continued, it should be means-tested.

“That actually targets those lower-income families who really struggle to get into the housing market and doesn’t advantage wealthy families who can support their kids into the market at the cost of those lower income families.”

But the Master Builders Association says the enhanced scheme should be kept as it is, minimising the effects of the global financial crisis.

“We put to the government that … the best bang for the taxpayers’ buck would come from keeping the boost for new housing,” chief executive Wilhelm Harnisch said.

“It does generate new activity, it does generate jobs, it also has the multiply effect into retail, manufacturing and other sectors.”
http://www.news.com.au

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