Updated October 23, 2012 01:30:33
New mums, universities and lobby groups are among those who have criticised the Federal Government’s budget update, which yesterday revealed $4 billion worth of savings.
The Mid-Year Economic and Fiscal Outlook shows lower commodity prices and falling tax receipts have trimmed the projected 2012-13 budget surplus to just $1.1 billion, down from the $1.5 billion predicted in May.
The savings include cuts to the baby bonus and a change to make large businesses pay tax monthly instead of four times a year.
“We haven’t taken any of the savings that we’ve made lightly, but we’ve made sure that they don’t hurt the economy or don’t hurt the most vulnerable,” Treasurer Wayne Swan said.
Opposition Leader Tony Abbott does not like the changes and argues the cuts will put extra pressure on already stretched households budgets.
“Wayne Swan is hurting families’ budgets so he can patch up the Government’s budget,” he said.
The Coalition is not alone in its criticism of the mid-year economic update.
Greg Evans from the Australian Chamber of Commerce and Industry says the cuts are bad news for the economy, especially for the retail sector.
“The mainstream economy is still in a fairly tepid condition and we’re seeing these budget cuts against that background,” he said.
“I think that will have an over-riding negative impact on consumer confidence.”
Mr Evans says he believes changing the way businesses pay tax will make Australia less competitive in the long run and reduce consumer confidence.
“There’s no free lunch when it comes to these issues,” he said.
He says companies are being made to pay for the Government’s surplus and spending priorities.
New mums are unhappy too and say the loss of the baby bonus is short-sighted.
Mother-of-three Bernadette Mitchell told the ABC that with each new arrival, the baby bonus helped her family make ends meet.
“I have used it on many items including a pram, basic necessities for a newborn baby including nappies, formula, wipes, singlets, all of the basic things that you tend to run through a lot of with a baby,” she said.
From July next year, for parents having a second or subsequent child, the baby bonus will be reduced from $5,000 to $3,000.
Mrs Mitchell says that will make some parents think long and hard.
“We didn’t have to worry about where that extra money was going to come from to pay for those basic necessities.
“It made it much easier for my husband and I to decide to have a third child. And it would definitely impact on our decision if we were going to have a fourth.”
We asked our audience if they would be affected by the cuts. Read their comments.
But demographer Nick Parr is expecting the birth rate will remain the same despite the reduction.
“In my opinion it’s unlikely to have any significant affect on the birth rate,” he said.
“We did see up until 2008 something of a recovery in the birth rate, but I think that was partly a catch-up effect following a sustained period of postponing births.”
Finance Minister Penny Wong said it was never popular to make decisions to find savings.
“Notwithstanding that some people think it’s very easy, it’s rarely popular,” she said. “My view is you have to think about where you want to be in the long term.
“And you want to make sure you have a sustainable health system that governments can continue to fund in the years and decades ahead and a sustainable family payment system, and these changes… contribute to that sustainability.”
Universities Australia’s chief executive Belinda Robinson is bitterly disappointed by newly-announced funding cuts and says there could be job losses.
“There’s a real danger here that governments are treating research as a short-term cost saving when quite clearly it’s a long-term gain that requires a long-term investment,” she said.
Ms Robinson says higher education will be getting $1 billion less than it expected and there are cuts to research funding, support for postgraduate degrees and other funding has been deferred.
She says major universities that are research intensive, will have to make cuts of their own to balance the books.
“They’re going to be hit the hardest and they’re going to be, I’m sure they’re reviewing their budgets as we speak to see how they’re going to accommodate the changes that are inevitably going to take place from next year on.
“And that could include staff and we’ve already seen one of our vice-chancellors coming out earlier today saying that they will be looking at their research staff levels.”
Ms Robinson adds that there is a danger of eroding some of the core policy agendas of the Federal Government.
“They have identified innovation and research as fundamentally underpinning Australia’s long-term well-being, particularly as we move away from an economy that is very vulnerable to the resources sector, to one that’s in need of diversification.”Mid-year economic update 2012-13new projected surplus for 2012-2013amount projected surplus has shrunk by since May’s budgetsavings and extra charges included in the updatehit to tax revenue included in forward estimates
estimates savings achieved by pegging increases in the private
health rebate to inflationamount saved by limiting baby bonusmoney saved by shutting down Medicare teen dental program
increased revenue over four years from raising visa charges for backpackers,
graduates, overseas workers and partners of people already in Australianew forecast revenue from mining tax, over four yearsold forecast revenue from mining tax, over four years
money raised by making larger companies pay their tax instalments on a
monthly instead of a quarterly basis
blowout in cost of dealing with the rising number of asylum seekers arriving
by boatnew campaign to “improve understanding” of National Broadband NetworkTopics: budget, federal-government, business-economics-and-finance, community-and-society, university-and-further-education, australia First posted October 22, 2012 20:41:54