Treasurer Hockey pledges budget surplus 'as soon as possible'
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Treasurer Hockey pledges budget surplus 'as soon as possible'

The government has further downgraded its pledge to fix the budget with Treasurer Joe Hockey now promising a surplus "as soon and possible".

Mr Hockey unveiled the new target during a PowerPoint presentation to a meeting of Coalition MPs in Canberra on Tuesday.

"We will get the budget back to surplus as soon as possible," the document says.

"All new spending will be offset by savings that are responsible and fair."

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Treasurer Joe Hockey unveiled a PowerPoint presentation on the upcoming budget to Coalition MPs on Tuesday.

Treasurer Joe Hockey unveiled a PowerPoint presentation on the upcoming budget to Coalition MPs on Tuesday.

Photo: Robert Shakespeare

The budget preview revealed to the party room on Tuesday promises small business and families will be the main beneficiaries through a tax cut and childcare package.

The document cites the Mid-Year Economic Fiscal Outlook (MYEFO) as showing the budget is "on track" to return to surplus. Treasury projects the budget returning to surplus in 2019-2020.

Prime Minister Tony Abbott has claimed the recently released Intergenerational report shows the government returning to "broad balance" within five years on measures already passed. However the report makes the prediction based on budget measures that are yet to be approved by the Senate.

John Roskam, from the free market think tank Institute of Public Affairs, criticised the government's new fiscal approach.

Part of Mr Hockey's PowerPoint presentation to Coalition MPs.

Part of Mr Hockey's PowerPoint presentation to Coalition MPs.

"I fear [as soon as possible] sounds like 'not in our lifetime'," he told Fairfax Media.

"What this does is it saps the initiative for reform and I fear we are missing the opportunity to communicate to the public that difficult decisions and choices are going to have be made."

Former Howard government minister Peter Reith has expressed fear the government's claims of a "budget emergency" before the election and subsequent fiscal response "do not add up".

Writing in Fairfax Media, Mr Reith said the promise of a surplus in 2020 is a meaningless promise that can't be believed.

"Anything could happen in the meantime," Mr Reith wrote.

"Most of those who voted for the Coalition expected the Coalition to fix the mess left by Labor, not to sit back and see the fiscal situation become significantly worse.

"The real fear is that both sides of politics might persuade themselves that they have no choice but to walk away from fiscal repair prior to the next election."

Asked for comment on Mr Reith's article, cabinet minister Malcolm Turnbull told reporters the current level of debt is "too high" but has to be reduced "in a responsible way".

"As Tony Abbott said many times, our number one commitment was to fix the budget and we are determined to do that," he said.

"There is no-one on our side who thinks the current deficit is at a satisfactory state of affairs," he said.

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Latika Bourke is a reporter for The Sydney Morning Herald and The Age based in London. She has previously worked for Fairfax Media, the ABC and 2UE in Canberra. Latika won the Walkley Award for Young Australian Journalist of the Year in 2010.