Budget leaks are a time-honoured tradition. This year, with a Global Financial Crisis-affected Budget, leaks to the press are being used to help people — especially higher income earners — adjust to the idea that it won’t just be bonuses and payouts.
We’re no Laurie Oakes, but here’s a Crikey list of leaks and Budget 09 speculation so far. Looks like there might not be much left to announce tomorrow night.
Several news outlets are now reporting the deficit to be $58 billion, a turn around of $80 billion since last year’s budget promised a $22 billion surplus. The 2009 budget deficit is expected to take six years to be paid back.
The Age, May 12
Unemployment — expect it to go up:
The government will announce new projected unemployment rates, with estimates of unemployment rates rising from 5.4% to 8.5%, leaving around a million Australians unemployed by 2010.
The Age, May 12
Wealthy retirees’ pension cut:
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In a bid to fund pension increases, pensions will become more strictly means tested to combat against wealthy retirees receiving pensions. Currently pensioners can earn up to $41,000 and still be eligible for pension payments and up to $10,000 worth of benefits.
The Daily Telegraph, May 12
Paid parental leave for 2011:
Slickly leaked to coincide with Mother’s Day, the government announced a paid parental scheme to be launched in 2011. The plan, rumoured to be worth $260 million annually, falls short of recommendations from the Productivity Commission report for paid parental leave which proposed $450 million worth of payments per year and two weeks’ paid paternity leave.
The Age, May 11
Superannuation tax breaks rolled back:
Salary sacrificing, the process in which income earners could sacrifice money — $50,000 for the under 50s and $100,000 for the over 50s — into their superannuation at the tax rate of just 15% will be halved.
The Age, May 10
Childcare rebates to be means tested:
Treasurer Wayne Swan has refused to deny rumours that the Budget will insist on childcare rebates being means tested. The rebates, which included 50% off the cost of childcare, were a key election promise in Rudd’s campaign.
The Australian, May 9
Worth a reported $25 billion, the biggest infrastructure overhaul in over 50 years includes plans for key rail, road and port projects. The scheme, including a Melbourne-Brisbane heavy rail freight corridor, is expected to be partly funded through state government contributions and private investments.
Business Spectator, May 9
Government superannuation matching reduced to 100%:
Currently the government matches superannuation contributions by 150% — up to $1500 — for employees earning less than $60,000 per year. By cutting government contributions to just 100%, $1.4 billion is expected to be saved over four years.
The Age, May 9,
Private health rebate cut for higher earners:
Likely cut to the 30% private health rebate for middle and high income earners — singles earning $120,000 and couples earning $240,000 will get no rebate. This is expected to save the government $1.9 billion.
Sydney Morning Herald, May 8
Capping Medicare safety net:
The government is likely to cap Medicare claims on IVF treatment, obstetrics and varicose-vein treatments in an attempt to stop supposed rorting by medical professionals. There are claims that this means many will be unable to afford IVF treatments.
The Age, May 7
Boost for border security:
The recent increase in asylum seekers arriving on Australian shores by boat ensures that the border security will receive a boost in this year’s Budget in the unveiling of the Regional Action Plan. It is expected to be worth around $500 million
SBS, May 7
Australian Federal Police increase:
As well as border security funding, there is also reported funding of $80 million to help counter-terrorism measures abroad.
SBS, May 7
Cigarette tax increase:
Since tax increases on cigarettes are usually quite popular with the general public, expect cigarette prices to increase after next Tuesday. Reports indicate the government could make $1 billion with cigarettes and alcohol tax increases combined.
Sydney Morning Herald, May 7
Money for Indigenous health services:
Reports say the $3.8 million will be given to focus on diabetes in Indigenous communities. The funding, to be used to improve testing and help better manage the disease, will be received over a four-year period.
The Australian, May 6
Plans to update drought assistance funding from the current exceptional circumstances drought funding system have been postponed. Land and Water Australia, which received $13 million annually, will close.
The Australian, May 6,
Tax cuts for higher earners:
Rudd has guaranteed tax cuts amid speculation of which election promises won’t be met. Aimed at middle and high income earners — those earning $80,000 to $180,000 a year — the tax cut will be see the rate drop from 40 to 38%.
The Australian, May 5
With the release of the recent White Paper outlining government military spending totaling $300 billion in the next decade, this year’s Budget will outline details of major military spending and how the government will afford the White Paper’s plans.
ABC News, May 3
Expect a Budget deficit:
Although last year’s Budget promised a $22 billion surplus, thanks to the GFC the 2009 Budget deficit could blow out to as high as $50-80 billion. It is expected it will take six years for the debt to be paid back.
The Daily Telegraph, May 2
Unemployment benefits on hold:
Despite the current economic state, with expected higher unemployment levels and lobbying from the welfare lobby, it’s unlikely that unemployment benefits will be raised this year.
Sydney Morning Herald, April 29
Alcohol tax increases:
Despite the failed alcopops tax introduced last year, it is likely that alcohol will face tax increases in the 2009 budget further price hike. Whether the tax will apply to alcopops or other alcoholic drinks is yet to be seen.
The Australian, April 27
First home buyers’ scheme diluted:
Criticism that the first home owners” scheme has only increased housing costs has not stopped the government continuing the scheme. However, it is likely to be adapted to only apply for new houses requiring construction.
Business Day, April 25
Cuts to Health and Hospitals Fund:
Although another $5 billion was expected to be received by the Health and Hospitals fund set up last year, reports are that it is likely to be cut. The funding was to be used by health care provides for updating equipment, new technologies and new facilities.
Ninemsn, April 24
Cuts to Higher Education money:
Original plans were for a $7 billion spending on higher education, but these plans are being cut significantly thanks to the GFC. Instead, it is likely that the funding will be spread out over the coming years.
The Australian, March 27
Rudd has confirmed that age pensioners, disability support pensioners, veterans and carers will receive increases to their fortnightly pensions. It’s expected the pension for single age pensioners will rise by $30 per week.
The Australian, March 26.