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It is a wafer thin surplus

and quite a massive

achievement really for a

Government to be able to turn

a $40 billion deficit around

into a $1.5 billion surplus.

The Opposition takes all

sorts of issues with the

numbers as we heard from Tony

Abbott there before, saying Abbott there before, saying

that it won't be a real

surplus and it's worth

pointing out it is a surplus

only on paper, we won't

really know until towards the

end of next year whether the

surplus will actually be met.

We will take you now to the

floor of House of

Representatives, where Wayne

Swan is delivering his Budget

speech.

First reading a bill for

an Act to appropriate money

out of the consolidated

revenue fund for the ordinary annual services of the

Government and for related

purposes. Madam deputy

speaker I move that the bill

now be read a second time. Speaker the Treasurer has the

call. The four years of

surpluses I announce tonight

are a powerful endorsement of

the strength of our economy.

Resilience of our people and

the success of our policies.

Madam Deputy Speaker in this

uncertain and fast changing

world we walk tall as a chase competent Livornoing within

our main -- as a nation competently living within our

mine r means we deliver a

Budget this coming year on

time as promised and surpluses each year after

that strengthening over time.

It funds new cost of living

relief, for Australian

families. It helps business

invest. Compete, and adapt to

an economy in transition. And

it finances bold new policies

to help Australians with a

disability, the aged, and

those who cannot afford

dental care. It does these

things for a core Labor

purpose, to share the

tremendous benefits of the

mining boom with more

Australians. To create more

wealth, prosperity and jobs,

spread more opportunity and

advance the living standards

of millions of families and

pensioners on modest incomes.

Tonight we make a forceful

statement that ours is one of

the world's strongest

economies and fairest

communities. Not even a

sovereign debt crisis in

Europe, or unprecedented natural disasters here at

home could deny Australia

this substantial achievement. The deficit years of the global recession are behind

us, the surplus years are

here. Surplus is built on

some difficult savings.

Surplus is built on some

difficult saving which is

avoid sul nerable Australians

and frontline services which

don't compromise our

investments in productivity.

Surpluses that provide a

buffer against global

uncertainty and continue to

give the Reserve Bank room to

cut interest rates for

families like it did just last week. This Budget is

about discipline and

restraint, but also about priorities. Ensuring precious

funds are redirected to the

purposes and people that need

them most. Across the Budget

by saving and redirecting,

$33.6 billion we are

balancing the books, making

room for $5 billion in new

payment to households,

finding an extra $714 million

to help companies compete on

top of the $3.7 billion in

small business tax breaks.

Funding the historic first

stage of a National Disability Insurance Scheme.

Investing in dental services

for those that can least

afford them. And

strengthening the aged care

system. Investing in

productivity and

competitiveness by building

on key improvements in

health, education, infrastructure and clean

energy. And staying true to

our Labor ideals and to the

promise of a fair go.

Converting economic success

into real benefits for the

majority of Australians.

Since this Government came to

office we have stared down a

global financial crisis,

created over three-quarters

of a million jobs while

weaker of economies shed

millions of jobs, every Australian can be proud we

have one of the lowest

unemployment rates in the

developed world. Half what we

see across Europe and

dramatically lower than in

the US. Proud that economic

growth is expected to be

stronger than every single major advanced economy over

the coming two years. We have

solid growth in real GDP of

3.25% in 2012-13 and 3% in

2013-14. By mid 2014 our

economy is expected to be

over 16% bigger than it was before the global financial

crisis. Again, outstripping

the major advanced economies.

Unemployment is forecast to

remain low at 5.5% in the

next two years. next two years. Official

interest rates are lower now

than at any time under our

predecessors. And we have an

investment pipeline of over

$450 billion in the resources

sector alone. Our budget

strategy is custom-built for this combination of

strengths. And for an economy

returning to more normal

rates of growth. A surplus

provides our best defence provides our best defence

against dramatic changes in

the global economy. A

moderate recovery in the US still has a long and difficult road ahead and

Europe continues to cast a

shadow over the global

outlook. We are closer than

ever to the epicentre of

global growth as the weight

of activity moves towards

Asia. This transformation on

our doorstep brings new

opportunities, not just in

mining but in services,

manufacturing, and in our

rural economy where the

outlook is bright. And

because of our economic

success over four difficult

years just passed, we face

the transformations of the

Asian century from a position

of strength. Of course these

forces are making for uneven

conditions across our patchwork

patchwork economy. We understand sustained high

dollar weighs heavily on

parts of the economy and

global encertainty has bred

consumer caution. This has

ripped billions from our

revenue base with tax

receipts as a share of GDP

not expected to recover to

pre crisis levels for some

years. In the coming year tax

as a proportion of the

economy is just 22.1%.

Compared to 23.7% we

inherited from our

predecessors, that's $24

billion less tax. In total

this year and next taxes are

down a further $12 billion,

since the last update. Taking

the total write down since

the crisis to around the crisis to around $150 billion. This has contributed

to a deficit 2011-12 of $44

billion and means net debt

will now peak at 9.6% of GDP,

just a 10th of the level of

major advanced economies. Delivering surpluses when we

have less tax revenues means

we need to make substantial

savings to pay for new

initiatives. It is these responsible decisions which

return the Budget to a

surplus of $1.5 billion in

2012-13 and growing every

year after that. This

delivers on our commitment to the Australian people on time

as promised ahead of every

other major developed

economy. This Labor

Government knows for too many

- this Labor Government

knows that for too many

Australians it feels like

someone else's mining boom.

Somebody else's prosperity.

So tonight from the

foundations of a surplus

Budget we announce new

policies to spread the

benefits of the boom. These new measures are new measures are good for low

and middle income families

because they help them to

make ends meet and get ahead

and good for our economies because they help manufacturing retailers and other businesses that risk being left behind because of

the high dollar. 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 why we have gone into bat for

working families. By providing help with the cost

of raising children, through

our paid parental leave

scheme and our childcare

rebate. It's why we have

delivered $47 billion in

personal income tax cuts, and

that's why we are tripling

the tax-free threshold to

benefit low and middle income

earners. So that all

taxpayers with incomes up to

$80,000 will get a further

$80,000 will get a further modest tax cut this year. And

it is why we provided an

annual increase of up to

$4,208 per child in family

tax benefit part A for

parents of school children

aged 16 to 19 from the start

of the year. And it's why we

have increased the maximum

rate of pension by a record

$154 per fortnight $154 per fortnight for

singles and $156 for couples

since September 2009. And

it's why families and

pensioners are receiving

further assistance through higher payments and tax cuts

to help transition to a clean

energy future. And tonight we

go further. I'm proud to

announce a new spreading the

Benefits of the Boom package.

$3.6 billion to share the

proceedings of the mining tax

with families and small --

proceeds of the mining tax

with families and small business. The Government has always been committed to

sharing fairly the benefits

of the resources boom and

every step of the way we have

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

will not allow this parliamentary gridlock to

deny Australians the benefits

they deserve. So in this

Budget, in this Budget the

funds for company tax cuts

have been redirected to

families, Mr Speaker, in a

way that helps the economy

including small businesses. Madam Deputy Speaker at the

core of this package is $1.8

Bilbul on in extra -- billion

in extra support for families

from more generous family

payments from July next year,

more than 1.5 million

families will benefit from

increases to family tax

benefit part A with nearly

half taking home an extra

$600 a year. We will also

invest $1.1 billion in a

supplement of up to $210 a

year for students, job year for students, job

seekers and parents with

young children and on income support. On top of the new

measures funded from the

mining tax we are also giving

parents more help with the

cost of schooling their kids.

From next year we will

deliver a new school kids

bonus. This will replace the

education tax refund and will

provide an extra $2.1 billion

in more

in more timely relief 1.3 million families. They will

no longer need to keep their

receipts and wait until tax

time to claim the refund. By

making it automatic we ensure

families get the full

assistance they deserve and

we reach out to parents of

half a million children who

are currently missing out.

All eligible families will

receive a lump sum payment receive a lump sum payment

next month, then $820 for

secondary school students and

$410 for primary school

students next year. The super

reforms funded by the mining

tax will help more

Australians secure a better

retirement and give those on

low incomes a better deal. By

raising the superannuation

guarantee to 12% we will boost the

boost the retirement savings

of 8.4 million workers and

increase our pool of national

savings. As a result of this

reform a 30-year-old worker

on average full-time earnings

will retire at aged 67 with

an additional $118,000 in

super. We are providing a

higher concession al

contributions cap for older Australians with balances

below $500,000 with a revised

start date of 1 July 2014. We

are improving the fairness of

concessions for contributing

to superannuations by

ensuring around guarantee to 12% we will guarantee mo 12% we will boost he

boost the reti of o 8.4 of 8.4 million o 8.4 million worker of 8.4 million workers and increase incre se our increase our pool incraase our pool of increase our ool of national savings. As a res Our multi-speed economy

is putting pressure on

business, that is not in the

fast lane. Our $714 million

loss carry back scheme will

support business in need to

help them compete. We will

encourage companies to invest

and innovate by offsetting a current current year tax loss of up

to $1 million against tax

paid in previous years. A

refund of up to $300,000 this

will support business when

they need it. Providing an injection of funds to invest

in new ideas, equipments, and

markets. So a cafe on a

tourist trip can get funds

they need to refurbish or

keep on valuable staff so

they are ready when

conditions pick up or a small

manufacturer can get funds to

retool so they can get

through the tough times and

make the most of opportunities sitting over

the horizon. We estimate this

will help around 110,000

businesses over the first

four years. Providing cash

flow when it's needed most

rather than down the track.

As well, from 1 July this

year all small business can

immediately write off every

eligible asset they buy for

up to $6,500 and up to $5,000

for cars or utes. These new

measures will drive

investment, improve

productivity, and make life

easier for up to 2.7 million

small businesses. We wanted

to do more for business with

a company tax cut but the

Opposition's negative tactics

have prevented that tax cut

occurring.. My message

tonight to business, large

and small, is that we are providing help now through

the measure s I have just

described and we will keep

working with you to seek

consensus on proposals from

the business tax working

group later this year. This Budget redirects and prioritises spending to

convert a more productive

economy into a fairer

community as well. Tonight

I'm proud to announce funding

for the historic first stage of a National Disability

Insurance Scheme. The most

fundamental social policy

reforms since Medicare. A National Disability Insurance

Scheme will ensure people

with disabilities get the

individual care and support

they need. Over 400,000 Australians live with a

significant and permanent

disability and are among the

most deserving of our support. Under this

Government they will start to

receive it. This Budget

commits $1 billion over four

years to roll out the first

stage of a National Disability Insurance Scheme.

Which is expected to cover

over 10,000 people from

2013-14 and 20,000 people

from 2014-15. This will

inform our discussions with

the states on how and when we

roll out the full scheme.

This Budget also provides

$515 million in funding to

address immediate dental care

needs. We know that many low

income earners face long

waiting lists for public

dental services. $346 million

over three years will fund a

blitz on public dental

waiting lists, and get care

to people who need it most

but can least afford it. We

are also boosting the public

system with $78 million to

help dentists relocate to

regional, rural and remote

areas, $81 million to boost

training for graduate

dentists and therapists and

$10.5 million to promote

better oral health. Those who

built modern Australia after

the second world war deserve

a 21st century aged care

system that honours their

contribution. With smarter

use of public and private

funding this Budget delivers

a $3.7 billion package to

address pressing airals of

need, and lays the -- areas

of need and lays the

foundation for future reform.

We know older Australians

want to remain in their homes

as long as pob so we will

provide -- possible so we

will provide 40,000 more home care packages over the next

five years. We are also

providing $6 60 million over

five year force incentives to invest in quality services

for those who do need to

enter residential care. And

$1.2 billion over five years

to build a better trained and

better paid aged care

workforce. We are also making vital investments right

across the health system and

right across the country. Our

historic national health

reforms will provide an

additional $19.8 billion in

Commonwealth funding for

public hospitals by 2019-20.

This Budget delivers 76 new health infrastructure

projects to upgrade regional hospitals and support

training where doctors are

needed most, costing $475

million. This is part of a $5

billion allocation from the

Health and Hospitals Fund,

with new hospitals and clinics creating better

services in regions where

previously they had little

coverage. We are also

spending $50 million over

four years to fund a phased

expansion of the national

bowel cancer screening

program. And our national

E-health agenda getting a

boost of $234 million so

people can have digital

accessible and consistent

health records for their

whole lives. We know the best

way for Australians to make

ends meet is to ensure they

can seize the opportunity to

work. This Government's job

creation record and workforce building initiatives are

among our proudest

achievements. Removing

barriers to work, and lifting

skilled to boost productivity

and creates wealth. The Prime Minister recently secured

$1.75 billion for the national partnership on

skills reform and that

delivers greater access to

quality training. The Budget

provides another $101 million

to support the Government's skills agenda. Building on the jobs bonus to encourage

the employment of older

workers, this Budget provides

$61 million to improve their training and employment

services. It provides an

additional $225 million for

the highly successful jobs,

education and training

childcare fee assistance

program which helps remove barriers for people with

young children who want to

get back into study or into

work. And we are investing

$1.5 billion over five years

on a new remote jobs and

community program that will provide new employment

services for remote Australia. This Labor

Government has almost doubled

investment in our schools

since coming to office. And

following the review of

funding for schooling final report, the Government is

working with stakeholders on

future arrangements starting from 2014. We are also

delivering in this Budget $54

million to encourage maths

and science studies at school

and university. And over the

next four years we will be

investing $38.8 billion in

higher education with extra

support for students, from poorer backgrounds. As well

as investments in education

and training, building a

stronger more competitive and

more productive economy

requires investments in critical infrastructure. The

national broadband network is

transforming our economy and our $36 billion

nation-building programs are

improving our road, rail, and

port networks. Like $3.6

billion to duplicate the

Pacific Hoy, meeting our

commitment to -- highway

meeting our communicate to

fund half the project provided the NSW Government also contributes its half.

also contributes its half.

Or joining with the private

sector to develop the Morbank

terminal to help freight flow

in Sydney and take the

equivalent of 3,300 trucks

off busy roads. And 232

million towards the Torrens

and goodwood rail project to

help ease congestion on

Adelaide's suburban and east-west freight east-west freight rail

networks. In coming years no

first world, first rate

economy will succeed without

cleaner sources of energy. So

part of the broader transformation of our economy

involves moving to a clean

energy future and helping Australian businesses and

households make the change.

The price on carbon pollution

that begins this year will

only be paid by Australia's

biggest emitters, it will not

be levied on families. But to

help with price increase

s Speaker Order! . But to

help with price increases we

are cutting income tax and increasing payments to pensioners, families and the

recipients of allowances beginning this month. As well

as spreading the benefits of

the boom this Budget makes

targeted savings to get back

to surplus and make room for

our priorities. Of $3.6

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

expenditure while prioritising support for 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.

For example -- what we inherited for example

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

the bill to the house. (APPLAUSE)

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

over the coming year and corporate Australia take's 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 Treasurer Wayne Swan this evening, as well as 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

the housing sector being particularly weak but they

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

policy that engineers a pick-up in economic

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

forum and out of those conversations that is

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

productivity enhancement? Well there is

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

serious about stabilising our region this is the

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