Package bolsters budget outcome
The Gillard government's $1 billion jobs package actually only spends an extra $421 million on new job-creating measures and delivers the government a handy $600 million to help its stretched federal budget.
The package saved $1 billion by cutting research and development tax breaks for 20 big companies - including banks, retailers and oil refiners - a figure that appeared on first glance to correlate with the $1 billion it claimed to be spending on ''supporting and creating'' blue-collar jobs.
But in fact the government will spend an additional $421 million over the next four years, with $600 million pocketed to help pay for other priorities in the May 14 budget, including the national disability insurance scheme and the Gonski education reforms.
Two of the spending programs included in the package had already been announced and funded - the $236 million Industrial Transformation Research Program and the $29.8 million for manufacturing technology innovation centres.
A third, the $378 million Venture Australia venture capital fund, is viewed as an equity fund and is therefore off-budget.
It is understood cabinet was briefed about the jobs plan having the additional benefit of helping to provide money for the government's other big-spending and as-yet-unfunded promises on disability and education. It is also understood the industry department proposed a smaller cut to the research and development tax breaks for the biggest companies, but was overridden by the Treasury Department.
The Coalition demanded on Monday to see the modelling upon which the government based its calculation that restricting research and development tax breaks for businesses with turnovers of more than $20 billion would actually deliver $1 billion in savings over four years.
Calculations of exactly the same measure for the business tax working group found it would raise at most $200 million a year, and even then only when fully operational.
Government sources said the business tax working group calculations were based on 2009-10 company tax returns, when businesses were still recovering from the global financial crisis.
The higher revenue calculations in its jobs package were based on more recent company tax data.
The jobs package, which strengthens requirements for big projects to show they have given Australian companies a fair chance to bid for work and tightens anti-dumping rules, has been welcomed by unions and industry groups.