It's only $1.5b, but Swan has a surplus

Treasurer Wayne Swan will flag today a modest surplus of $1.5 billion for 2012-13 while telling Australians the government has delivered on its promise to get the budget back in black.

At the same time Prime Minister Julia Gillard has promised to ''conquer'' the woes currently facing her government.

The surplus will grow marginally to $2 billion in 2013-14 and build over time.

Mr Swan will hand down his fifth budget tonight and say that the confidence the surplus provides will be matched with room for reforms such as the already announced Schoolkids Bonus, aged-care changes and the first stage of the National Disability Insurance Scheme.

But with confidence in the government being damped by the twin scandals over Speaker Peter Slipper and backbencher Craig Thomson, the Treasurer has a huge job selling his ''good news''.

The Canberra Times understands Mr Swan told his cabinet colleagues yesterday of the surplus figures and said the budget would be tough but fair.


He said the surpluses required substantial savings to be found, but they have been responsible, targeted and made primarily with a view to protecting working families, the most vulnerable in the community and frontline services.

The Canberra Times also understands that today's budget will extend the supplementation for the Department of Human Services.

The additional funding was due to expire this year, but the government will provide a further $203 million over four years that must be directed to frontline call centres.

The aim of the budgetary top-up is to provide more efficient services to people accessing assistance through Medicare and Centrelink and reduce customer waiting times.

Earlier yesterday, the Treasurer said publicly that the budget would show that the Australian economy ''walks tall'' in the global economy but supports low- and middle-income earners at home.

''It will also show that we in Australia have done so much better than many other countries around the world and what that means for Australia is that we can have confidence in our economic fundamentals,'' the Treasurer said.

The Slipper-Thomson scandals and plummeting opinion polls have threatened to completely swamp the government's message and strategy.

Ms Gillard has promised to ''deal with and conquer'' the political pressure her government is now under.

Ms Gillard told her caucus that today's budget will be an important tool in selling Labor's initiatives to the electorate.

The Prime Minister stressed that the budget would provide a buffer to global economic uncertainty while also giving the Reserve Bank the flexibility to further ease interest rates.

But the Coalition says Australians should be sceptical about any surplus figures the Treasurer announces today.

Opposition Leader Tony Abbott told his frontbench that the government's surplus would be based on ''fiddled figures'' and questionable bookwork.