Last night (14 May 2013) the Treasurer, Mr Wayne Swan handed down the 2013-14 Federal Budget; the sixth for the Labor Government.
The cash budget deficit is estimated to be $18bn for 2013-14, a turn-around of some $20bn from the $2bn surplus estimated last May. Mr Swan attributed the budget outcome to $17bn of less revenue than in the previous forecast, although acknowledging that tax revenues had actually increased some 6% from the previous year.
The budget position over the estimate period is forecasted as follows:
|
Forecast in: |
2013-14 |
2014-15 |
2015-16 |
2016-77 |
|
May 2013 |
($18bn) |
($11bn) |
$0.8bn |
$6.6bn |
|
May 2012 |
$2bn |
$5.3bn |
$7.4bn |
N/A |
Real GDP growth is predicted to be 2.75% in 2013-14 (down from the 3% estimated last May) and then increasing slightly to 3% in 2014-15. The unemployment rate is forecast to slightly increase to 5.75% (up from 5.25%), but this is still amongst the lowest in the developed world.
Mr Swan described the Budget as stronger, smarter and fairer. Significant investment is made in schooling ($9.8bn), DisabilityCare Australia ($14.3bn) and infrastructure ($10 bn).
Overall, the Budget contains few new tax related measures with most items having been previously announced. The focus is on addressing shorter term revenue pressures and closing (actual and perceived) “loopholes”. Unfortunately the Budget does not set out any plans for genuine reform of the tax system.
Some of the measures in the Budget will be legislated within the coming weeks, however, legislation for numerous measures will not be developed until after the Federal Election later this year. This creates a level of doubt as to whether the measures will proceed and if so, whether modifications will be made post the election.
We’ve summarised the key changes at the links below:
