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Sky News Budget 2012 -

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(generated from captions) billion of savings, about

half are reductions in spending. Like targeting

family tax benefit part A to

children under 18 or in

secondary school, or

decreasing pharmaceutical

benefit scheme spending by

negotiating lower pry prices

or deferring some defence

prioritising support for expenditure while

current overseas operations or meeting our commitment to

lift spending on foreign aid

to 0.5% of gross national

income a year later. We are

also taking steps to improve

the fairness and sustainability of the tax

system while keeping tax as a

share of the economy lower than what

than what question inherited.

inherited for example For example -- what we

limiting tax confessions for

golden Han shakes and living

away from home benefits which

typically accrue for high income earners and not

proceeding with a standard

deduction because our reforms

for the tax-free threshold

will free over 1 million

taxpayers from needing to

lodge a tax return. Making a

tax system more sustainable

not only achieves savings now

but benefits the Budget

bottom line for decades to

come. It's this fiscal

discipline that has earned up

a AAA rating from all three

major rating agencies for the

very first time in our history. This Labor

Government believes the tremendous opportunities of

the mining boom should be shared fairly

shared fairly with all

Australians. Ours is a

country where people who work

hard should get fairly

rewarded. Where there is an

optimism that comes with

economic and social mobility.

In a global economy marked by

anxiety and uncertainty our

nation is the beacon of resilience, stability and

success. Not just for the strengthening surpluses we

will build years ahead of will build years ahead of our peers. Not just for the

growth rates out pacing the

major advanced economies over

coming years. But for the

resilience of our people, and

the value we attach to the

fair go. And now amidst great

change new challenges lie ahead. That's why this Budget

supports workers and parents

and helps businesses prosper. It's why we are It's why we are boosting

super and skills, aged care

and dental care, and building

an insurance scheme for the

most vulnerable. All good

Labor policies with one

purpose - to create more

wealth and turn our remarkable economic success

into a stronger, fairer

community as well. I come end

(APPLAUSE) the bill to the house.

Treasurer Wayne Swan, now

they are handing down they are handing down his fifth Budget being congratulated by the Prime

Minister and his colleague,

good evening and welcome to

our coverage of Budget 2012

on Sky News and with its back

to the wall, Labor has gone

for a cash splash in

tonight's Budget, targeted at

the so-called working

families, the battler, the

Labor heartland that's desert

the party over recent years,

$5 billion is being targeted

directly into the hip pockets

of middle and low income

earning families. But to keep

that surplus pledge, you

heard the Treasurer repeat

there and again point to a

surplus in the coming

financial year, he has had to

make some deep spending cuts.

And they will effect defence,

also there is a broken

promise on foreign aid that

is no longer going to be increased on the schedule it

was meant to be, also 3,000,

in fact more like 400 public

in fact more like 400 public

service jobs to go -- 4,000

public service jobs to go

corporate Australia take's over the coming year and

hit with the company tax cut

that was meant to come with

the mining tax no longer

going ahead. Tonight we will

take you through all of the

details, what this Budget

means for you, your family,

your job, and the economy. We

will also be looking at what

it means politically for a

Government struggling,

desperately in need of a

lift. We will be talking to evening, as well as Treasurer Wayne Swan this

evening, as well as the

Shadow Treasurer Joe Hockey,

the Greens leader Christine

Milne, key independents who

support will be critical in getting the Budget through,

business community leaders,

all joining us tonight as we

look at the details. First

let's take you through what

are the key points, families

are the focus as I said, take

a look at this, this is what

Wayne Swan is calling the

battlers Budget, the key

measures for family, $1.8 billion in increased billion in increased family

payments, that will mean up

to $600 more pravrn for those

on family tax benefit A, it

depends how many children you

have, and what your income is

but up to $600 per annum

extra on top of that $1.1

billion in what's being

called a supplementary allowance this, is

essentially a $210 handout to

people on various welfare benefits,

benefits, the unemployed,

parents with young children,

they will Alice Springs all receive from March next year

a $210 payment, $350 for

couples. And that will be

ongoing. It will be an annual

payment for them. On top of

that as was announced onto

weekend the $2.1 billion

school kids bonus, $820 per

child if it's a high school

student, $410 for primary school students, the

Government wants to deliver

an annual payment of those

figures in June this year and

then from next year it will

become a twice yearly

payment. Let's look at what tonight's Budget mean force

business, they are the big

losers in -- means force

business, they are the big

losers in in this budget.

First and foremost there is

one benefit, a relatively

modest benefit, a loss carry

back scheme, what will this

mean for small business

directed at. It means they

can claim up to $1 million of

losses against previous years

profits how many will that

apply to, and the big news tonight the 1% company tax

cut that was promised under

the mining tax package is gone. The Government had struggled to get this through parliament, it hadn't even

put the legislation to a vote, because the Greens

opposed it or at least the

tax cut for big business and Tony Abbott opposed it

because it was part of the

mining tax so that is now

gone and that's a big saving

for the Government. There

will also be tighter rules on

executives golden handshake

s, tighter tax treatment of

those and also the living

away from home allowance is

going to be tightened as well

for executives. Let's look

where the new spending

measures are and families

make up the bulk of it. $5

billion in total in new money

for families. The business loss carryback as we

mentioned is going to cost

$700 million, the aged care package, that's already been

announced, the major reforms

of aged care, an extra $1.8

billion committed in

tonight's Budget, the National Disability Insurance

Scheme, long promised by

Labor, does get some real

money tonight, $1 billion to

take the first steps towards this new National Disability

Insurance Scheme. We are

going to talk more about that

this evening as well. The

Pacific Highway gets a $3.6

billion injection, something

Rob Oakeshott had been

demanding, and dental health, $515 million boost to blitz

the waiting lists of dental

health. Let's look where the

spending cuts are now around

there is $32 billion of them

in total this is quite a big

round of spending cuts.

Defence, takes the lions

share, that $5.4 billion,

much of this had been flagged

in the week leading up to the

budget, delaying the purchase

of Joint Strike Fighter,

cancelling plans for new

emissions purchase and also

delaying the Karibu aircraft replacements and also about

1,000 jobs to go in the civilian side of defence

that's a big hit there. And

also the company tax cut

which we mentioned, getting

rid of that is going to save

the Government about $4.8

billion, foreign aid, this is

the other big area the

Government has targeted

tonight, $2.9 billion in not

meeting that promised

increase in foreign aid by

2015, that will be delayed by

a year taking our foreign aid

spend to 0.5% of gross national income but doesn't

sound like much delaying it a

year but it will save $2.9

billion in this Budget,

otherwise would have been

spent on foreign aid. Already

this evening Tim Costello

said this is going to cost

$200 -- 200,000 lives in some

of the world 's poorest

countries, other spending

cuts 3,000 public service

jobs to go in the next year

on top of the defence

spending cuts, defence staff cuts, superannuation tax, we had already heard about this

in the weeks leading up to

the Budget, this is for people earning more than

$300,000 a year, so the wealthy have their superannuation contributions

taxed increase to 30%. The living away from home

allowance for executive as we

mentioned, $1 billion there.

Also some of the smaller

measures, the duty free

cigarette entitlement you can

currently buy a carton of

cigarettes duty free now only

two pacts now, the heavy

vehicle charge for truck

drivers means they will pay

more on their fuel tax, a

little bit more, it goes up

2.5 cents that will generate $700 million, the passenger

movement charge, this is for people travelling overseas,

that's to be increased. The

Budget bottom line, a surplus for the coming financial

year, but look at this, we

now look what this current

year we are n the 2011-2012

year a year ago Wayne Swan

talked about a deficit of $22

billion that's now doubled to

$44 billion. Next financial

year, 2012-13 which is what

this Budget is about, that

increases over the years the

surplus to $7.5 billion down

the track, the economic

outlook finally, a fairly

buoyant projection here for

what's going to happen in the

economy, growth expected to

increase to 3.25% that's the

trend rate next financial

year. Unemployment remaining

fairly modest at around 5.5%,

a little bit higher than

where it is now and the

inflation rate, 3.25%, let's

bring in our chief political reporter Kieran Gilbert and

Sky News contributor Peter

van Onselen for a quick look

before we get to some of the

guests tonight. Kieren what's the main take out of this

budget for you? It's, basically comes down to the

fact the Government's taking

money from the mining tax, and taking it from business and giving it to families,

it's an attempt to reconnect

with their heartland. I think

it's a clever Budget politically, as I say, it's

an attempt to try to get the

Labor heartland once again to

listen to this Government.

There are two big questions

though, that hang over this

Budget, as I have read it

today I thought it resembled

a Howard era buchgt the way

the family payments were

designed but as I say two big

questions over it as far as I

can tell, one is theate of

this Government to sell it.

John Howard could sell

budgets when he had had a

message, he could make that

message known and make

political capital out of it,

this Government, well I have

got enormous doubts as to

whether they will be able to

use this, the second big question is, when John Howard

delivered a Budget like this,

he had rivers of gold coming

in from the mining boom,

those rivers of gold look

ache lot more precarious

right now particularly in a

context of a global economy

so they have made a lot of

savings but they are spending

a lot as well and this wafer

thin surplus for me looks

very, very precarious indeed. Peter, the whole

point and message in this

budget is that we were going

to give the proceeds of the

mining tax to business now it

is going to families hip

pockets is that going to save

Labor? I think it could help Labor in the short term and

more accurately help the

Prime Minister in the short

term. Irony here is if at

Budget can deliver a slight increase in Julia Gillard's

personal numbers and indeed

the primary vote for Labor it

helps stave off any potential

challenge to her but does

that help Labor in the long

run it looks to me like

voters have an issue for her

so whether they can save

beyond her political bacon is

another matter but I would

like to put the surplus to

one side, I take the view the

$1.5 billion surplus is so small what we have had delivered for this financial

year which is a doubling of

what Swan said he will

produce last financial

year. He was out by $22

billion now he would say the

floods and disasters the

European economic problems

were the reasons for that,

but... He would be right but

the same thing applies then

to the next surplus doesn't

it, that if we have a

financial disaster overseas,

if we have intoes if the

growth forecast of 3.25 is

only slightly out, if the Australian dollar doesn't

come in at the expected $1.03

which the Government is

banking on if that changes

all of these adjustments can

massively erode which is an

incredibly thin surplus. Getting back to the

raw politics of this, it was

one thing for Tony Abbott to

oppose a company tax cut and

he copped a fair bit of grief

for it, will it be harder for

him to oppose the handouts to

family which is is now the

challenge the Government is

presenting him with? Absolutely it wedges

Tony Abbott on that it makes

it much more difficult to

block pam payments to

families he doesn't want to

validate the mining tax, but that's the way the

Government's going to pay for

these family payments. So it does make it more difficult.

As far as the Government's

spending cuts though, I think

one point should be made as

far as I could tell I don't think they look like difficult cuts politically they don't. They are quite

easy cuts politically to

sell, I think some of them

are very questionable. Like

the delay in aid spending if

Wayne Swan thinks we are such a great Budget and such a great economy leading the

world surely we can stump up

to meet the target on aid. A

good point because taking

money out of foreign aid and

defence is hardly taking

money out of people's pockets

directly. It will not cause

them too much pain what about

the business community here,

they are about to be hit with a carbon tax we know a lot of

them are struggling with the pressures of the dollar there

are job cuts going on left

right and centre that people

are read being in the

newspapers now they are not

going to get a tax cut. Is

that going to be a problem

for the Government? I think

it will be, it will be interesting to see the Government will try to pin this on Tony Abbott, they

will try to run the argument

obviously that he was

opposing the idea of company

tax cuts because they were

being included with other factors like the mining tax,

so therefore they this had to

act the way they have but it flies in face of all the rhetoric we have seen in recent times about the

two-speed economy and the

need to even out the economy

by having company tax cuts,

to help the parts of the economy that aren't thriving

the way the mining sector is.

Now we have got the mining

tax, that's fine but instead

of it going into those other

parts of the economy directly

through a company tax cut, it

is now going directly into voters pocketess which of

course has political benefits

for the Government I'm not so

sure the business community

will like it from an economic perspective. Thank you very much for that. So let's take

a closer look now at the

Budget bottom line about this

surplus. Some of the economic

forecast as well as how this

Budget does stack up

economically, Stephen

Koukoulis joins us now, what

do you think about the

overall Budget bottom line, a

$1.5 billion surplus can we

believe it? It's believable,

obviously as the discussion

has been it is dependant on

the economy growing 3.25%,

unemployment going know

higher than 5.5%, but that's

the vulnerability. The other

thing we should think about

if the economy is stronger

then maybe they will get a

Peter Costello surprise come MYEFO and have more

money. You think a growth

next if tishl year is likely

to happen? It is on the cards

now, what we have seen from

the Reserve Bank, have you

got to remember the context

of this is not just fiscal

policy money withdrawn from

the economy and fiscal contraction you have got to remember the Reserve Bank

pulls policy levers here,

they do it independent ly of

the Government OK but as we

saw last week with the 50

basis point rate cut they are

willing to act because the

economy is currently little

bit weaker inflation is

currently lower than what they were thinking so my

guess is what we are seeing

from the Government is a hope

the RBA acting independently trims rates a little a little

bit more that promotes a

desire to increase

expenditure, increase

investment and the economy

does get the... The Treasurer

has said this Budget would be

getting more room for the

Reserve Bank to cut interest rates. And yet he's putting

$5 billion into the pockets

of families. Is that going to

help cut rates or not? That's

the interesting thing, have

you got to remember too that

the flood tax is ending on 30 June as well so that's going

to be some extra money for

those high income earners who

are paying the flood tax.

Look the economy is

incredibly complex, fiscal policy does have a contribution in terms of the economy remembering

Government demand is 20% of

GDP so we are seeing this cut in spending which will actually subtract from the

economy next year so

therefore the onus is on the

privates that the private

demand business investment, consumer demand, how long

cycle all contributing to

growth, to get us back to

that 3.25%, it's in the

ballpark if we are quibbling

with the number it will be at

the margin and let's see what the Reserve Bank does in the

next couple of months as they

read the Budget papers as

well. Let's me ask you about

the decision to get rid of

the company tax cut, the 1%

company tax cut which admittedly the Government was

struggling to get through the parliament anyway, what

impact is this going to have

in the private sector? Look, lower taxes are always

desirable in terms of encouraging investment

employment and expenditure

and those sort of things so

at the margin it will be a

slight negative to their outlook for the private sector. The other thing to remember when you look at

these numbers is that the

context of the size of Government here, this budget if you go through the historical tables at the back if you want to be really dull

and boring like I sometimes

am, you see that the tax to

GDP ratio currently is

incredibly low, the last time

we saw that at that level is

back in the 70s so, the size

of Government now is actually

quite small and OK not

getting the company tax cut

I'm a little disappoint ed it

would have been nice to see that going through to the

business sector to see them

invest again but at the end

of the day it's a low taxing

budget and they have matched

it this time with big spending cuts to get that

small surplus in 2012-13. Do you think the Government has

done a good job with this

budget? It's a fair job in

difficult political circumstances, difficult economic circumstances, the

world economy is still

incredibly fragile, the Australian consumers

incredibly fragile we have

particularly weak but they the housing sector being

have done a job to lock in

the surplus, build a chest of

funds in case there is

another crisis down the tract

and RBA to be the side of

pick-up in economic policy that engineers a

activity. Thank you, to get

this Budget through the House

the Government will need the

support of either the

Opposition or the crossbench

spousht that it currently has

in parliament. -- support

that it currently has in

parliament. To get some

initial reaction at least I'm

sure they want to spend a bit

more time pouring through the

details let's see what they

think of the headlines announcements independents Tony Windsor and Rob

Oakeshott join me now. Thanks for your time. Rob Oakeshott

first to you what's your general take on the Budget what do you like and what

don't you like? It's a tight budget in a tight parliament personally I think it will pass, I will be really interested to see the Coalition response to some of

the measures in there. For me

the Pacific hoy is obviously

the big one, the -- highway

is the big one, the $3.5

billion for that, there is

now a tax reform, 35 page

document, that is part of

this budget and hopefully

it's there for a while. That has been something that's

come out of the tax forum at

the end of 2011, and is

really the road map for the

future so hopefully we can

build on that. Have they

really pursued tax reform in

24 Budget, this e-- in this

Budget they have shelved a

key Henry recommendation in

cutting the company tax

rate. I am pleased there is a

35 page document there and

hopefully it inviting long

term tax reform. Issues likes

the business loss carry back

have come out of the tax

conversations that is forum and out of those

substantial for sectors like

retail construction and

tourism right now who are

sectors feeling the pinch of

an economy that is changing.

So loss carry back is a big

win but, this 35 page

document does expose there

are some skinny elements in

the out years in regards

comprehensive tax reform you

are referring to. Twidz

what's your take on this Budget -- Tony Windsor what is your take on the

Budget? Think it will get

through the parliament, I

don't think it will have any

risk of doing that, there may be some minor modifications that some people would like to make I am very pleased

that the Government's adhered

to the regional packages, I

think they have been

something that we have been

keeping an eye on, very

pleased to see the caring for country initiative has been rolled on fore another five

year, it was being flagged as

something that can be wiped

out the land care

arrangements etc. So I thinks

it a pretty fair budget

actually. Wayne Swan - I was

God to add to that, 130 regional hospitals are now getting funded over the last two years that wouldn't otherwise have been funded that is significant for many

regional communities as is

something known as the FAD grounds which are direct

financial assistance grants

to local councils a small

item is bringing forward of

$1.1 billion for regional

councils at the moment, local road networks are collapsing

and the bringing forward of

that money is significant for

about 600 councils in Australia. The big change in

this Budget is redirecting

where some of the proceedings from the mining tax are

going, they are no longer

going to the company tax cut

they are going to families

pockets how does this sit

with you Tony first to you,

how does this sit with you

the idea of simply boosting

family payments, giving them

special one-off payments on

top of that. The school kids

bonus, all these sort of cash

handouts to families. Do you

think this is genuine

enhancement? Well there is productivity

obviously a bit of politics

in it. And Governments do

that. John Howard did it, this Government does it and

all Governments will. But, I

think there is an attempt

there, genuine attempt to try

and level out the multi-speed

economy as Wayne Swan calls

it. But some of the minerals

boom money is also going into

a national partnerships

agreement which is looking at

some of the key issues around

coal seam gas and coal mine development, so there

is... But the bulk of it is

going to families pockets do

you agree Rob Oakeshott that

there is politics at play

here? Sure, and we can all

see where the accusation are

going to come from but short

term, you know they are

representing a seat with a

lot of low income families,

this is talking to low income

families right now. And hopefully a sustainable for

the long term. Does it help

with the impvm concerned out there about carbon tax concerns out there how this is going to effect the cost

of living --. I think the

effect stands up on its own

and compensation in there

stands up on its own. In 50

days time that fear will

start to sort Stev out and

the compensation that starts

to flow through straight

separately will address that,

short term there are benefits

for low income families also

long term, you know, sorry,

short term as well, the

issues I have mentioned

before around construction,

tourism and retail, you could

argue this is a stimulus

package by sector. You know,

there are these surn of certain sectors of the

economy that are struggling,

cash in the pocket is going

to help those particular

sectors in need and hopefully

put I a about the of

confidence into people's

spending a bit more than they

would otherwise. Surely there

would be businesses in your electorate that would have

been hoping for that 1%

company tax cut? Yeah, but

1% isn't a lot when you are

coming down from 30% to 29%

and a lot of small businesses aren't structured as

companies so there are were a

lot of people who were

outside that small benefit.

Whilst it's always welcome

picking up what Cootes was

saying tax reductions are

welcome if it was not going to get through the parliament... But the Government could have got the small business part of it

through, the Greens were on

board for that. I was up for

that conversation as well. We

could have a progressive

company tax system like an

nvm system they have changed

-- income tax systemen they

have changed strategy and it

will be interesting to see

whether it does generate

confidence in small

communities. What about the

spends cuts there, the

foreign aid promise to

increase foreign aid spending

that's been pushed back and

saving nearly $3 billion how

do you feel about that? I

think a lot of people will be

disappointed to hear that and

no doubt the Treasurer will

say they will keep on trend

by bringing it back in latder

years. But -- latter career

years but that is something

we have to keep an eye on,

that could go down reasonably

well in some sector tos of

the society as well, we believe we spent too much

overseas, personally I don't.

I think we need to maintain a relatively high foreign aid

budget, we are part of the

globe and I think we have got

to assist those that need a

little bit of help. So,

stalling the progress, they

are not walking away from it

they are just going to bring

it back in in a year or two's

time. The $5.4 billion cut in

defence that's a lot of money

can we afford to lose that

much out of defence? I'm not

an expert, but I'm not opposed to that. I think we really need to have a close

look at what we are doing,

defence has been an empire

under itself for a long time

and we have seen a number of Defence Ministers, including

the one that's there now,

trying to come to grips with

some of the issues in

defence. The enormous amount

of money, I think it is $25

billion a year so we are

talking about $100 billion

over the forward estimates

and a $5 billion save, I

don't think that is that difficult to achieve given

the history of defence. And

there has been a fair bit of

waste in defence in recent

decades. Are there any

spending cuts that worry you

Rob Oakeshott, I know,

truckies are going to face an

increase in the heavy vehicle

user charge, means their fuel

tax will essentially go up

about 2.5 cents, will that

effect many if your

electorate? It will but

that's by agreement with the

states and that's not a policy decision of Government

that's part of a weight of

load s consideration that is

on going and is hard to argue against, probably the overseas aid one is the one

that stings the most. You

know, if we are the great

economy, 0.35 being the

number is very, very low by

equivalents and... Getting to

0.7 of a per cent of gross

national income. We could do

it and for, as Australia and

the Asia-Pacific region where

most of the action is in the Asia-Pacific region if we are

region this is the serious about stabilising our

contribution we could make to

for example stopping the

boats. If we want to pick up on some of the rhetoric if we

are serious about some of

that stuff stabilising our

region and commits to good

overseas programs within our

region is a sensible

sovereign activity let alone

one for the region. Just on

that road transport thing,

there are certain aspects of

that that actually have

reduced costs as well. That national transport

arrangement were you talking

about. The - some of the trailer configurations will

actually be better off and I

think it's the road trains

that are going to suffer. So

just finally, to you both,

you both made it clear this Budget will get through, there is nothing in there

that you can see that you

particularly want to vote against? Not at this stage,

we have still going through t

we have only really just

picking through the documents

now but look I think in a

tight parliament, it's a

pretty tight Budget from my

perspective it looks like one

that will get through. Do you

think Wayne Swan has done a

good job? Nothing leaps out

and me and says that's a

no-no, I think the regional

stuff has been covered well,

there is a lot of education

issues here too, setting up

for Gonski as well, a few

good things happening. Tony Windsor, Rob Oakeshott good

to talk to you both. One of

the key elements in terms of

new spending measures in

tonight's Budget is $1

billion to start the process towards a National Disability

Insurance Scheme. This is something the federal government is going to work

on with the states. Something

it's talked a lot about and

tonight has put some money,

where its mouth has been on

this issue, the man who has

been driving the agenda on the National Disability Insurance Scheme, is John

Della Bosca the former Labor

innocence in NSW and now with

Every Australian Counts, the

alliance of groups that have

been pushing this issue,

thank you for joining us are

you happy with the $1 billion tonight? Yes, I thinks it a

very good start, it's the

foundations for building a

National Disability Insurance Scheme. It's something the

Prime Minister promised to

the very large demonstrations

of public support that are

organised a week or so ago

and she's delivered on that

promise tonight. Did you want

to see more? Look, it's not a

question of more, it's a

question of putting in place the scheme and the scheme

according to the Productivity Commission's recommendations

requires launch sites,

requires a lot of hard work between the Commonwealth and

the states to work out how

best to put in place what is

a very significant change to

the way disability support is

delivered. And the Prime

Minister's undertaking a week

ago was suggesting she would

put that in this Budget or

that it would be in this

Budget and tonight's Budget

certainly features enough

funds... Now money has been

committed, I guess a lot of

the serious questions and

work will begin how this

thing is going to work. One

of the concerns some already

have is about eligibility for assistance under this scheme.

Will it be the same as the

Disability Support Pension

which for years and years

Governments have tried to

tighten up because of

rorting, is there a chance

that we could also see rorting of this new

scheme? There is almost no

analogy between the existing

Disability Support Pension,

which is an income support

supplement and the National Disability Insurance Scheme

which is a scheme to provide

care, support and aid

equipment, therapy for wheem

severely and permanently

disabled so the two are like chalk and cheese in terms of

one the population of people

that receive the Disability

Support Pension, and also the

way in which they are

intended to work. So I

wouldn't expect that would be

anything that would be an

issue, what would be an issue is the difficulties in

working out a very fair assessment system, that's one

of the things that will take

the time of these launch sites. Can you explain, if

you are assessed as eligible

for this and, initially we

are obviously talking about

severely and permanently

disabled people, if you are

the parents of a child who is

in that situation, what is

this going to mean? What

will it allow you to access that you can't

currently? Just about

everything I think is the

correct answer. The point about disability support is

that the best practice in

disability support is to have

early intervention, whatever

it is you need, whether you

are a child with spalsy or

downs syndrome or an adult

who has been injured in an

accident, has a spinal

injury, what you need is

early attention to your needs. And you need that to

be personalised as far as is

possible, and you need that

to be when and as you need

that support. Under our current system people wait sometimes years for basic

support, we have been saying

in our campaign, more recently, that people can

wait up to two or three years

for a while chair, something

as basic as that, people find

themselves on support

packages where they are only

entitled to two showers's week. These kinds of things

are unacceptable in Australia and and the National Disability Insurance Scheme

will start the change which

will mean those things will mean those things are

things of past and people get

proper care and proper

support and they don't only

have a better lifestyle but

to make a bigger contribution

to society. A lot of work

still to be done but a start. After the break we will be talking to Treasurer Wayne

Swan about tonight's Budget.

Stay with us.

Welcome back to our

ongoing coverage of Budget

2012 on Sky News, in a moment

we will be joined by

Treasurer Wayne Swan for a

look at the finer detail of

his fifth and he says toughest Budget let's take you through some of the

details first of all. It is a

battlers budget, it is taking

money that was to be directed

to business, in a company tax

cut, now scrapped that money

instead going to families,

hip pockets, low and middle income households in

particular. Families are the

big winners in tonight's

Budget a $5 billion boost all

up. $1.8 billion of that as

you can see on the screen

there increasing family

payments depending on the

number of chir children you

have that could give you an

extra $600 a year per child

on thap of that $1.1 billion

in a new sup plem endry

allowance that will mean --

sum plementry allowance, that

will mean $210 per single

$350 per couple for various

welfare recipients including welfare recipients including

the unemployed and parents

with young children. Also

$2.1 billion that was announced over the weekend a

school kids bonus, that

includes $820 per high school

student, $410 per primary

school student. The

Government hoping to make its

first payment in June this

year. Before the new

financial year begins when

the Government is of course

so much hoping to get back into

into surplus. It was the Treasurer Wayne Swan a little earlier talking about the

importance of this Budget to

families. We understand the pressures Australians face,

paying for electricity,

housing, groceries petrol, or

even a simple family outing.

That's why we have gone into

bat for working families. By

providing help with the cost

of raising children through

our paid parental leave

our paid parental leave

scheme, and our childcare

rebate. It's why we have

delivered $47 billion in

personal income tax cuts, and

it is why we are tripling the

tash flee threshold to

benefit low and in --

tax-free threshold to benefit

low and income earners so up

to $80,000 they will get a

further modest tax cut this

year. As part of a package called Benefits of the Boom

it is not just families

there, is something for

business, and a new measure

announced tonight for small

business in particular by the

Treasurer a loss carryback

scheme which will allow small

business to claim losses of

up to $1 million against previous years profits. But

that's where the good news

ends for business, the 1%

company tax cut that was

promised is part of the

mining tax package is now

scrapped. The Government had

struggled to win over support

in parliament for this, Tony

Abbott of course had opposed

it because it was part of the

mining tax package, the

Greens had also been opposed

to offering a 1% company tax

cut for big business. They

were prepared to back a tax

cut for smaller business but

certainly not big business.

The final measure a couple of

other measures in terms of

saves from the Treasurer

tonight, they include

tightening the rules around executive golden handshake

payments and the living away

from home allowance. The

Treasurer Wayne Swan spoke

earlier tonight about the

legislative road block he faced on the Kensington

Palace tax cut. The

Government has -- on the company tax cut.. The

government has committed to sharing fairly the benefits

of the resources boom and

every step of the way we have

been opposed by the been opposed by the Coalition. For example, our company tax cut has been

rejected in full by the Liberals and Nationals and in

part by the Greens. And we

will not allow this

parliamentary gridlock to

deny Australians the benefits

they deserve. So in this

Budget, in the funds so the

company tax cuts, have been

redirected to families, Mr

Speaker in a way that helps the economy, including small

business. Treasurer Wayne

Swan in parliament, a little earlier this evening and I'm

pleased to say the Treasurer

joins me now, thanks now your time. Good to be here. You

have the Government, has been

struggling in recent years to

remain a grip on the Labor heartland, is this Budget

going to help you win back

some of those traditional

Labor supporters? Certainly I

don't apologise for the

measure that spread the benefits of the benefits of the mining boom

as widely as we can. Amongst

low and middle income earners but that's something that the Labor Party's believed in for

a long period of time and

it's something that we have

been doing in our previous

years in government but here,

in this Budget we had the opportunity to spread the

proceeds of the mining

resource rent tax out around

the community in a different

way than had been originally proposed, and given the cost

of living pressures that people are under I think

appreciate that because one people will certainly

of the things that I am very

keen on is that we have got

to give more Australians a

stake in this mining boom. So

many Australians feel that

they really are not part of

it, it's somebody else's

boom. So in addition to

making sure that we put in

place that tax relief for

small business, a loss

carryback which is $700

million over four years in

addition to that making sure

that we can give a bit extra

to families from 1 July

2013. It is different as you

said to the original proposal

of a mix, two years ago in your Budget speech, you said

that the company tax cut that you were planning to

introduce would boost our competitiveness, expand

investment and job opportunities. You have now

scrapped that and put the

money into families. It is

why, the fact is Menzies, the

so-called party of business

and in particularly small business, they have decided

that they are going to oppose

it and they have been

vociferous in their

opposition. You have got the

tax cut through for small

business with the help of the

Greens? We have got a

substantial tax cut for small business. Loss carry back. It

is not a tax cut though.. It

is tax relief, it's very

important for them I think

the business community as a

whole will see that as being much more effective than the

cut that we had in place for

those small incorporated

businesses. Why couldn't you

prevail upon your friends the

back the rest of the Greens and independents to

Kensington Palace tax

cut? The Greens always -- the

company tax cut. We said we will get support for the

party of Menzies for a company tax cut.

Extraordinary they have a

policy not to cut company

taxation but to increase it

so, they weren't going to

support it the Greens are

certainly not going to

support it so we have taken

the opportunity to spread the

benefits of the boom more

widely. How is spreading it more widely giving it to

families going to do those

things that you outlined

boost competitiveness, expand

investment and job opportunities? The fact is it

will be very good for economy

and very good for a lot of

low and middle income

families. Will it boost productivity. I make the

point we have not given up

certainly on a business tax

agenda and certainly we have

huge productivity agenda when a huge productivity agenda. A

it comes to skills, to

education, to infrastructure,

to re regulatory reform we

are working in all of those

areas. Couldn't you have done

something more for business

tonight many of them will be

hit with a carbon tax soon, a

lot of them are under

pressure from the dollar,

they are now not going to get

a company tax cut, they are

job cuts going on left right

and centre when you read the

papers every day couldn't you

have done more for them

today? We wanted to do more

and the Liberal Party said

no, they weren't going to

support it. I mean this is

the party which is now saying

no to the MRRT, the mineral

resource rent tax so they can

give a tax cut to the likes

of Clive Palmer and Gina Rinehart. That's what it has

got to. They weren't going to

support a company tax cut,

the Greens sently weren't

going to support it so we

have taken the responsible

position to spread the

benefits of the boom more

widely across the community

to low and needle income

earners. Is there a danger

that $5 billion all up that

will go to families will do

the opposite what you said

this budget will do and that

is provide more room for the

Reserve Bank to cut interest rates? No, I don't think

that's a danger at all. The

fact is that we have fact is that we have got

contained inflation, we have

got growth, returning to

consumption I think we have trend, we have got solid

got those figures in a pretty

good space but we do have a

patchwork economy and parts of the country the economy is

soft so the measures for

small business, the instant

asset write off which can go

up to 2.7 million small businesses is quite important

and you haven't mentioned that. Because that is a

measure which comes out of the

the mining tax. And is funded

by it that startses on 1

July, we have now got the loss carry back coming in as

well so it's a pretty big

small business package but we

are keen to sit down with the business community and

discuss the company rate, and

how we can go about reform in

that area but you know, it

takes support on the floor of

the parliament and it's not there. You said in your

speech tonight that Australia

can be proud of having one of

rates, strongest economic the lowest unemployment

rates, strongest economic

growth rates in the world, we

are you said "A beacon of

resilient stablity and

success" if we are such a

beacon why then can't we

afford to meet the promise we

have made on foreign

substantially increasing aid? Because we are already

foreign aid I have brought

down a budget where savings

have been of the order of

#34dz billion, every area of

the budget has been touched.

Foreign aid is still

increasing, still increasing,

we have taken one year longer

to get to the target. How

many countries in particular

the British are going a lot

further than we are... I am

sorry I don't think that's

true. I think you will find

that there is probably no developed economy who is

doing more in the area of

foreign aid, even after... An

the British getting to 0.7%

of gross national income In

Europe, I don't specifically have the British figures in

front of me a number of

countries in Europe are not

moving, we are continuing to

increase our aid. Tim

Costello says tonight this

will cost 200,000 lives this

decision. I think that is

just ridiculous, the fact is

that we are substantially

increasing our aid, after the

decisions we have taken

tonight, aid will continue to

increase, and as I understand

it we will get to six in the

world by 2015-16 after the

decision we have taken

tonight. The fact is, that if

you will bring down a budget

like this it had to have an

impact across the board,

range of spending I think we have been very responsible in what we have done with

been across the board but foreign aid as we are have

there is no way we could

leave one particular area out, particularly the area in

the Budget which had been

increasing the fastest. More

than 4,000 jobs are going to

go in the public service over

the - in just one year. What

do you say to those workers? Well,

workers? Well, I am not - I

don't think it's quite

accurate to say 4,000 jobs

just go I think the truth is

when female leave they may

not necessarily be replaced

-- when people leave they may

not necessarily be

replaced. I think the impact

overall, as I understand it,

in terms of full-time

equivalent employees is about

1%. Right. So, yes, we are being pretty tough about it

but we are not in but we are not in a position

where masses are moving out.

But certainly, like all areas

of the Budget, there to many

some restraint. You said this

will be toughest budget what

do you think will be the most

unpopular part of it? That's

for all of the

commentators. What was the

toughest part for new putting this together? Getting the

savings together, $33

billion, $34 billion of

savings is a big exercise

when you are bringing down

your fifth budget. The

surplus, $1.5 billion say modest surplus. Of course it

is but it builds over

time. How sure can we be

given the forecast deficit

for this year, has doubled,

how sure can we be you will

get $1.5 billion, what

guarantee can you give people

determined to get there but about that. I we are

the fact is events do occur from time to time last year

we had the biggest natural

disasters in our history and

it Fair to say we underestimated to some extent

the full impact of that over

time it has cost the budget

bottom line $6 billion, and

more than that, a 6 billion for Queensland, and on you go

at the end of last year a

very big down turn in the

European economy, which

transferred through to

particularly a lack of

confidence among consumers

here, all those things happen

sod revenues came down substantially so we make our judgments based on the

outlook we see, we see growth

returning to trend and

unemployment at 5.2 and a

very strong investment

pipeline and solid

consumption we still walk

tall in the world but we have

a patchwork economy, where

not everybody is in the fast

lain and we are -- lane and

we are trying to get the

balance of that right. Thank

you. Let's look a few more

details we have been

discussing with the Treasurer

families, and we looked at the elements for

families, and for business,

the new spending measures and

we heard some of them there,

all up families are getting a

$5 billion injection in terms

of higher family payments,

the one-off allowance that's

also been announced tonight

and that school kids bonus

announced over the weekend.

Other new spending measures

here, the business loss

carryback the Treasurer was

just telling us about, $700

million, there is also the $1.8 billion in additional

funding for aged care, this

is all part of the 3.7

billion aged care reform,

some of that is taken from existing spending. In terms

of this aged care reform that

was announced a few weeks ago

by the Government, other new

the National Disability spending that $1 billion for

Insurance Scheme, we

discussed with John Della

Bosca the Pacific Highway that Rob Oakeshott was

welcoming through his neck of

the woods in the mid-north

coast of NSW that $3 .6 billion in additional federal

funding to upgrade the

Pacific Highway and dental

health more than $500 million

to blitz dental health

waiting lists. Spending cuts though, there are some difficult spending cuts as

the Treasurer just put it to

us, defence, takes the lions

share, $5.4 billion in

defence spending cuts announced in tonight's

budget, some of this had been

pre announced by the Prime Minister and Defence

Minister, just at the end of

last week they do include

delaying the purchase of the

first 12 Joint Strike

Fighters, also, delaying the

replacement of the Karribus

and also scrapping plans for

new artillery units as well.

And, big defence cuts on the

civilian side too, about

1,000 civilian positions to

go in defence. On top of that

the company tax cuts, well,

$4.8 billion is saved by not

proceedings with that 1%

company tax cut that was tax

attached to the mining tax

and then foreign aid as we

were discussing with the

Treasurer there, $2.9 billion

saved by delaying the

promised increase in the

foreign aid budget, something

World Vision's Tim Costello has condemned this evening,

he believes this could put in

danger some 200,000 lives by

$2.9 billion not going to the world's poorest unlikely,

that we will see too much

political damage to the

Government for not going

ahead with an increase in

foreign aid spending at the

moment. Other spending cuts,

3,000 public service jobs to

go in fact it's more like

4,000 when you look into the

numbers and take out some of the increase that's actually

going to the uniformed side

of defence, so big job

reductions in the public

service, although the

Treasurer was just telling us

there that this isn't going to be mass redundancies,

there will be simply natural

attrition across the public

service. But they are, these

cuts are hitting education,

in particular, as well as the

department of workplace

relations. So, the cuts do go

across the board in the

public service. Other

spending cuts, well, the

superannuation tax increase

for wealthy Australians for

those earning more than

$300,000 a year, their tax on

super contributions will rise

from 15% to 30%, this has

been a tax concession enjoyed

by the wealthy that is going

to be closed off to an extent

by this measure in tonight's

Budget. The living away from

home allowance, this is going

to save the Government $1

billion in tightening the

rules around the living away

from home allowance claimed

by company executives who are

often working in two cities.

Other spending cuts, well

duty free cigarettes, you at

the moment are able to buy a

carton of them now only two packet which is will save the

Government about $600 million, the heavy vehicle charge will save the

Government $700 million and

essentially means that an

increase in the fuel tax, the

cost of fuel for road trains

and other heavy vehicle

users. About 2.5 cents a

litre. The passenger movement

charge, this is going to be a

$610 million savings measure,

this applies to those outward

bound leaving Australia t

will increase the passenger

charge there by about $8 to

$55. The Budget bottom line,

let's take a look at that, as

we discussed there with the

Treasurer, the current years

deficit has blown out from

the projected $22 billion as

it was a year ago to now

being $44 billion so that

budget deficit has doubled.

The budget surplus though has

been protected for the com