"The surplus will build over time" ... Treasurer Wayne Swan. Photo: Alex Ellinghausen
Treasurer Wayne Swan is predicting a modest surplus for 2012/13 when he hands down his fifth budget on Tuesday, but one that will contain measures to support small business.
Last November Mr Swan forecast a $1.5 billion surplus in the next final year compared to a $37.1 billion deficit in 2011/12.
"It will be a modest surplus, the surplus will build over time," Mr Swan told the Nine Network on Sunday.
"The aftershocks of the global financial crisis have hit our revenues."
Mr Swan said the government has had to make very significant savings because revenues had been down around $150 billion over five years since the GFC.
'Loss carry-backs' for small business
The aftershocks of the global financial crisis have hit our revenues - Wayne Swan
The government is also going ahead with a recommendation from its Business Tax Working Group to introduce in the budget from July 1 "loss carry-backs" for business - where a company applies operating losses to a preceding year's income to reduce tax liabilities.
"At the moment small businesses can only carry their losses forward to be offset against future income and future profits," he said.
"They can't carry their loss back and offset it against past profits."
It will be capped at $1 million of losses with a maximum benefit to any firm of $300,000.
While he would not put an exact figure on the cost to introduce the measure, he said it would be in the "hundreds of millions" over the forward estimates.
The carry-back measure will be implemented along aside the already announced $6500 instant write-off from July 1, which Mr Swan described as a "huge boon" for 2.7 million small businesses.
"This will be a significant package for small businesses across Australia that aren't in the fast lane," he said.
He also confirmed a new bonus for one million families with school-aged children to replace the existing education tax refund.
Under the means-tested SchoolKids Bonus policy, parents will receive $820 a year for each teenager they have at high school, and $410 for every child in primary school.
The direct cash payments are being introduced after more than 600,000 eligible families failed to claim $300 million in rebates.
"It will be welcomed by families that are doing it tough ... this will be there when they need it," he said.
There will also be $500 million set aside in the budget for what he described as a "blitz on public dental waiting lists".
"The numbers on public dental waiting lists are extraordinary high, something like 400,000 people," he said.
The budget will brought down in the midst of renewed speculation that there are concerns in the Labor Party about the leadership of Prime Minister Julia Gillard and her deputy Mr Swan, talk that the treasurer was quick to dismiss.
"We have got the runs on the board, and we are getting on with the job," he said.
"The prime minister is as tough as nails, and she ain't going anywhere."