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Swan gears up to unveil first Rudd Govt budge -

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Swan gears up to unveil first Rudd Govt budget

The World Today - Monday, 12 May , 2008 13:10:00

Reporter: Lyndal Curtis

ELEANOR HALL: In Canberra, and tomorrow the Federal Treasurer, Wayne Swan, will deliver the first
Labor budget in 13 years.

Already the Government has confirmed that it will contain tax changes that will slug higher income
earners and also an easing of the thresholds at which people have to take out private health
insurance or face a higher Medicare surcharge.

And as the Rudd ministry holds its final meeting before budget day, the Opposition is dismissing
the budget as a whole lot of spin. The Greens are calling for even tougher spending cuts.

Chief political correspondent, Lyndal Curtis, reports from Canberra.

LYNDAL CURTIS: The numbers are locked in, the budget's been printed and the Treasurer is putting
the final touches to his budget night speech.

Wayne Swan will be the first Labor Treasurer to bring down a federal budget since Ralph Willis in
1995.

And while he probably wouldn't want to be known as the housekeeper, that's what he says the
Government will be doing.

WAYNE SWAN: I'm confident that Australians will understand the need for tough decisions, because
sometimes good housekeeping does require tough decisions, tough decisions to protect against
international uncertainty and tough decisions so we can plan for the future and invest for the
future.

LYNDAL CURTIS: The Government does want to be seen as Robin Hood, and already some of the decisions
it's announced fall into that category: upping the tax on luxury cars and means testing the baby
bonus.

But it's also making it easier for people to avoid taking out private health insurance, by raising
the threshold at which the Medicare surcharge for those without private health cover kicks in.

The Government says it's removing people caught in a tax trap where rising incomes push them into
the surcharge net. And the Finance Minister Lindsay Tanner has told Radio National he doesn't
believe it will mean the public system will shoulder a bigger burden as people shed their private
insurance.

LINDSAY TANNER: We don't believe that the changes will trigger any kind of rush to the public
sector, but we've already injected very substantial additional funding into the public health
system.

LYNDAL CURTIS: But the Shadow Treasurer Malcolm Turnbull has told Radio 2GB, the move on health
insurance is a mistake.

MALCOLM TURNBULL: As people stop taking, stop renewing their private health insurance, courtesy of
Mr Swan, health insurance costs for everybody else will go up, demands on the public hospital
sector will go up. It is a very misguided decision.

LYNDAL CURTIS: The Opposition is warning the budget will be full of spin and driven by ideology.
And rather than Robin Hood, Malcolm Turnbull is painting Wayne Swan as an inexperienced and
indecisive treasurer.

MALCOLM TURNBULL: I really wonder whether he knows what he's doing, I mean, one minute he talks
about the budget as though he's Robin Hood, robbing from the rich to give to the poor, the next
minute he says he's going to make huge swingeing cuts to spending, to drive down inflation. What's
it going to be?

LYNDAL CURTIS: The Greens leader Bob Brown doesn't think Wayne Swan is being as much like Robin
Hood as he could be. And Senator Brown is calling for means testing on the tax cuts.

BOB BROWN: It's still going to be a budget that's going to give much more to the big end of town
than to the average battler. And you've only got to look at the seven billion plus in tax cuts
which are going to be favouring those people who are on high incomes to see how that works.

LYNDAL CURTIS: The Treasurer is adamant his way is right. He doesn't agree with economists who say
the economic risks from the us downturn and credit crunch will be more than outweighed by the
buckets of money rolling in from the continuing commodities boom.

WAYNE SWAN: We're not going to be as lucky as the previous government when it came to revenue
upgrades, so we can't be as lazy in terms of our response. That's why we have had to make
significant savings. The previous government just relied upon endless increases in taxation revenue
to fund increase in spending.

We haven't got that luxury. We've got to go out and work hard to find our savings, to put downward
pressures, pressure on prices and downward pressure on interest rates.

LYNDAL CURTIS: And what does the Treasurer think the headlines will say on Wednesday?

WAYNE SWAN: A responsible budget, to build a strong economy, which delivers for working families.

LYNDAL CURTIS: He doesn't have too long to wait.

ELEANOR HALL: Lyndal Curtis reporting.