Budget 2014: Tony Abbott confirms a debt levy, but says the Gold Life Pass for retired politicians will go

TONY Abbott says the public will respect the government for tonight’s Budget, after confirming a debt levy for anyone earning more than $180,000.

TONY Abbott has given his colleagues a pep talk, telling them the public will respect the government for tonight’s Budget, even if they don’t like all of it.

The Prime Minister harked back to John Howard’s 1996 Budget, saying that “hard Budget” set up his government for its long stint in office.

Stressing the need to be fair, Mr Abbott talked up the amount of structural reform to be revealed in tonight’s documents.

“This is a watershed moment when a bold new government does what has be done to set the nation on a better course,” he told MPs and Senators.

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Foreign Minister Julie Bishop urged colleagues to enthusiastically sell the Budget as she praised Mr Abbott’s performance.

“The Prime Minister has led us with conviction and judgment and courage,” she said.

Ahead of tonight’s release several MPs voiced concerns about the number of leaks during the Joint Party room meeting.

This morning, the PM confirmed the Budget will include a debt levy for people earning more than $180,000, but tried to assure Australians he will be paying too.

The Prime Minister has also revealed Gold Life Passes for retired politicians will be completely axed, alongside an MP pay freeze.

Caput ... Prime Minister Tony Abbott says the lifetime Gold Pass for politicians’ are gone.

Mr Abbott, who pockets a salary of more than $500,000, said he will have to pay about $6500 under the new tax to target high income earners.

“I don’t want people to say ‘Oh those blokes in Canberra are making me suffer while they get off scot free’,” he told 2GB Radio this morning.

“So there will be a deficit levy on high income earners, the lifetime Gold Pass for politicians’ gone, finished, caput, dead, finally and yes there will be a pay freeze.”

The Gold Life Pass hasn’t been available to those who entered or re-entered Parliament after March 2012, when Julia Gillard closed the scheme.

But those who served previously were in line for one when they retired or were voted out, though with a reduced quota of 10 domestic return trips with a family member a year.

Everyone will have to help in the repair job, Mr Abbott said.

“What I don’t want is for a pensioner to be able to look me in the eye and say ‘I’m bearing pain and you’re not’, because it’s got to be fair.”

Uni students will be forced to start repaying their study debts sooner under a Budget measure to cut education costs.

Mr Abbott confirmed he will squeeze more money out of students by lowering the income threshold for repaying HELP debts.

The Government could also increase the interest rate applied to student debts.

The changes are likely to work in tandem with a shake-up of tertiary education, which could see universities allowed to significantly hike fees.

Students currently only have to start repaying their debts when their income reaches $51,000.

The government’s Commission of Audit recommended cutting this threshold to the minimum wage — currently $32,354.

Asked whether he would address the problem of people not repaying student debts, Mr Abbott said “there are some changes in this area this evening”.

“The fact is that a university education is very good for the people who get it,” Mr Abbott told 2GB.

“We estimate that on average you earn about 75 per cent more over a lifetime as a graduate than as a non-graduate.

“So, it’s right and proper that people who are getting this important benefit should pay a greater share of the cost of it.”

Cuts in the national interest ... said Treasurer Joe Hockey in Canberra this morning. Picture: Gary Ramage

Mr Abbott described tonight’s release as a “problem solving Budget”.

There will be “short term pain” he admitted, but insisted it is “pain with purpose”.

Opposition Leader Bill Shorten criticised the Prime Minister for introducing a deficit levy, after pledging not to bring in new taxes before the election.

“Tony Abbott’s confirming that he is breaking promises,” the Opposition Leader told reporters in Canberra, but refused to say whether or not Labor will try to block the measure in the Senate.

“We will wait and see the detail of what he does tonight,” he said.

The Budget will reflect a “mean agenda of broken promises and twisted priorities”, Mr Shorten argued.

“It is not the job of the Abbott Government’s Budget to put pressure on family budgets.”

But Joe Hockey this morning maintained the cuts were in the national interest.

“If you’re only looking in the Budget for your own interests, then you may be disappointed but if you’re looking for the national interests you will be cheered,” he said.

The Treasurer described his first Budget as a “terrific Budget for Australia’s future”, arguing it will shape the nation’s destiny.

Despite the Coalition promising no new taxes before the election and now deciding to impose a deficit levy and fuel excise hike, Mr Hockey denied they have gone against their word.

“Don’t assume there are broken promises. The most significant promise we made was to fix the budget, to build a strong economy and tonight we’re getting on with the job,” he said.

Mr Hockey urged Labor and the Greens to back the measures they outline tonight.

“It will be an easy budget to criticise, but for the nation it will be an important budget to support.”

He claimed sharing the pain was necessary to avoid “an eventual train crash on the budget”.

With Steven Scott

Originally published as Budget 2014: Tony Abbott confirms a debt levy, but says the Gold Life Pass for retired politicians will go