2014 federal budget a hard sell
The government is warning voters that tough measures to be announced in its first budget are in the nation's best interest.PT1M48S http://www.canberratimes.com.au/action/externalEmbeddedPlayer?id=d-3871g 620 349 May 13, 2014
Tony Abbott has flagged a tougher budget than the Howard government's slash-and-burn first budget in 1996, telling his party room the Coalition government faces a ''watershed moment''.
In a final rallying cry to colleagues before Treasurer Joe Hockey hands down the budget on Tuesday night, the Prime Minister said the budget would contain ''more structural reform than any budget, including the '96 budget''.
''The public will respect us for this budget even if there's parts of it they don't like,'' Mr Abbott told a meeting of Liberal and National Party MPs in Canberra.
''This is a watershed moment when a bold new government does what has to be done to set the nation on a better course.''
He said the Howard government had gained ''economic and political credibility'' by taking tough decisions in its first year.
The Abbott government has been criticised for its plans to introduce new ''taxes'', including a temporary deficit levy on high earners, the reintroduction of indexation on fuel excise and a Medicare co-payment for visits to the doctor and hospitals.
The budget is expected to contain sweeping cutbacks to welfare payments and will lead to large cuts to the public service – about 16,000 jobs are speculated to be in the firing line.
Mr Abbott told the joint parties meeting on Tuesday that the budget would ''shift focus'' in government from Labor's ''short-term consumption to long-term investment''.
Deputy Prime-Minister Warren Truss and Foreign Minister Julie Bishop both warned colleagues that the tough decisions had to be taken in the government's first budget as they were in 1996.
Mr Abbott drew some criticism from the floor of the meeting for the leaks to media over the government's budget plans.
He responded, saying the government had ended up with the ''right document''.
Senior Liberals say the federal government is bracing for a backlash when voters see the full scale of cutbacks and broken promises in the budget.
The prediction is fuelling a febrile mood on the Coalition backbench and suggests the nation is in for a harsh budget aimed at driving the balance sheet back to the black more quickly than previously indicated – perhaps within as little as four to five years.
Earlier on Tuesday, Mr Abbott said his government’s first budget would bring ‘‘pain with a purpose’’, as the Coalition government braces for a backlash from voters.
During an interview on Sydney radio on Tuesday, Mr Abbott confirmed for the first time that the budget would include a 'debt levy' as well as the reintroduction of indexation on fuel excise, the abolition of the lifetime gold pass – a travel perk available to retired politicians – and incentives to business to employ older workers.
But Mr Abbott's planned debt tax – a 2 per cent levy on people earning more than $180,000 – may falter in the Senate with the Greens, Palmer United Party and thee Senator-elects stating their intention to block the controversial measure.
Tuesday night's Budget is expected to contain sweeping cutbacks to welfare payments and will contain unpopular announcements such as large cuts to the public service – about 16,000 jobs are speculated to be in the firing line - a GP fee of between $7 and $15 and a future rise in the pension age to 70.
Laying the blame for the "budget crisis" at the feet of his predecessors, the Rudd and Gillard governments, Mr Abbott conceded that some of the measures would be unpopular with voters, but he believed they were necessary.
''Yes, there's got to be short-term pain, but it's pain with a purpose,'' he told Macquarie Radio.
''This is a problem-solving budget because we do have a very serious problem of debt and deficit, stretching as far as the eye can see.
''But it's also a nation-building budget.''
Mr Abbott confirmed there would be $11.5 billion set aside for infrastructure projects, and that profits from the rise in the fuel excise would be directly funnelled to road projects
A scheme to pay businesses a $10,000 incentive bonus to employ workers over age 50 will also be contained in the forward estimates, as the centrepiec of a productivity drive by the government to boost participation of mature age workers.
Treasurer Joe Hockey also defended the budget on Tuesday morning, dismissing questions from journalists in Canberra about ''broken promises''.
"I would say to the Australian people if you're only looking in the budget for your own interests, then you may be disappointed, but if you're looking for the national interests you will be cheered. This budget is about shaping the destiny of our nation," he said.
But Opposition Leader Bill Shorten said on Tuesday that the budget would be an "agenda of broken promises and twisted priorities".
"It is not the job of the Abbott Government's budget to put pressure on family budgets," he told reporters in Canberra.
"There's a new petrol tax, there's a new doctors' tax, a GP tax, there's new taxes on medicines, new taxes on going to the hospital.''