2014 Budget hole looks likely

Savings measures already counted by the Abbott government may not yet pass the Senate.
 
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01.Slated Budget savings far from a sure thing

Collection of receipts in blue shading

A range of federal Budget items that the Abbott government hopes to kick into gear at the start of the financial year are far from a done deal, even though the related savings have already been factored in for future projections. 

The temporary two per cent tax on high-income earners called for in the Budget now looks sure to pass through the Senate, following confirmation from Labor finance spokeswoman Penny Wong that the opposition won’t block the measure. It’s expected to generate about $600 million in 2014-15.

Recent polling indicates that just over three-quarters of the electorate (or 76% of 1000 survey respondents) are against cuts to public hospitals, while about 60% reject higher prices for prescription medicines, raising the petrol tax and pushing pension entitlements out to age to 70 – all elements of the Budget. 

If these and other unpopular measures are blocked, the government’s budget numbers are unlikely to add up. 

One such measure, a two-year freeze on the indexation of family payments and a lower indexation of some pensions, has reportedly already been slated to deliver $400 million in savings in 2014-15. But it appears to have little chance of getting past Labor and the Greens in the Senate. 

According to an analysis by the Australia Institute, other measures that have been factored in to deliver savings in the coming financial year but that will face stiff opposition include a three-year freeze on income thresholds that determine eligibility for family payments to single parents (Parenting Payment Single), Youth Allowance (student), Austudy, Abstudy, Newstart Allowance, Widow Allowance and the Child Care Benefit.

 
 

 

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