Wayne Swan has delivered his promised budget surplus, with a $44 billion deficit in 2011-12 expected to turn into a $1.5 billion surplus in 2012-13 thanks to more than $32 billion of cuts.
Here are the 10 key points from the 2012 budget:
- The Government will scrap its planned 1% cut in the company tax rate, which was due to start for small businesses from July 2012 and for larger businesses a year later. The Government says it remains committed to the cuts but blamed the Opposition for blocking them. This measure alone will save $4.8 billion over the forward estimates.
- The plan to introduce standard tax deductions of up to $1,500 has been deferred, in a move that will save $2.1 billion over four years.
- The Government will crack down further on its living away from home allowance in order to save $1 billion, and will tighten termination payment tax breaks to rein in “golden handshakes” for executives.
- The planned tax breaks for green building programs will be dumped entirely, saving $405.2 million over the next four years. The Government says the program no longer represents value for money.
- The Government has confirmed the introduction of the loss carry-back tax break for businesses. The measure will cost $714 million over the next four years.
- Cash handouts to low and middle income families will increase substantially, with $1.8 billion to boost the rate of Family Tax Benefit Part A and a new Schoolkids Bonus that will replace the Education Tax Refund at a cost of $2 billion. In addition, the Government will spend $1.1 billion on supplements for those on income support.
- As foreshadowed, tax concessions on super contributions of those earning over $300,00 will be cut, in a move that will save $946.5 million. In addition, plans to introduce a higher concessional contribution cap for those with less than $500,000 in super will be deferred.
- Treasury has forecast growth of 3.25% for the 2012-13 year, with unemployment tipped to tick up to 5.5%. Inflation is expected to fall to 2.5% over the next two years.
- The budget is predicted to bounce back from a surplus of $44 billion in 2011-12 to a surplus of $1.5 billion in 2012-13 and a surplus of $2 billion the year after.
- The Government has made a number of smaller spending initiatives, including $30 million for a new manufacturing technology centre and $61 million for a plan to attract Asian tourists.