Federal Budget 2015: Treasurer Joe Hockey says deficit will defy predictions
IT’S supposed to be Hockey’s big day but already a photobomber has stolen his spotlight while others predict a budget ‘horror story written by Stephen King.’
THE Treasurer has kicked off budget day with yet another awkward moment for the cameras, but a selfie-seeking photo bomber is likely to be the least of Joe Hockey’s problems today.
In the middle of convincing journalists his second budget would defy market expectations and deliver a blowout well below the predicted $40 billion, Mr Hockey was accosted by a young woman in front of a groaning press pack.
“I don’t want to feel like Kevin Rudd here,” a blushing Mr Hockey said as he posed with the girl, swearing: “It wasn’t a set up.”
The interruption came amid the Treasurer’s traditional budget day door stop in which he pushed the message that his budget would beat predictions and focus on “giving people the opportunity to have a go”.
But others predict what will unfold later today as “a cross between a horror story written by Stephen King and (Munch painting) The Scream”.
While the Treasurer may be working hard to convince everyone the Abbott Government’s second budget is all his doing, it’s unlikely he’ll have to worry about anyone trying to take credit for what’s tipped to be a “nightmare” announcement tonight.
Ahead of the big reveal, Joe Hockey has only announced one budget measure himself, and it didn’t go down too well.
Yesterday’s announcement of a so-called Netflix tax, which will impose GST on imports of downloaded books, music, videos and software, was slammed as “the more bizarre media conferences I have ever seen”, by shadow Finance Minister Tony Burke.
Mr Hockey has been copping it over the past few days with Social Services Minister Scott Morrison out and about taking credit for more popular family and childcare announcements while the Treasurer works behind the scenes, fuelling rumours the unofficial Budget salesman could be after his job.
But he tried to turn that around taking the stage yesterday with a surprise announcement designed to “level the playing field for the GST” supposed to raise $350m over four years.
He also announced legislation that would mean the Australian Taxation Office would have the power for charge tax on profits diverted offshore and to fine 30 corporations that pay little or no tax on profits from Australian operations.
Mr Hockey didn’t name the companies nor could he say how much the measures would raise, prompting the Opposition to label it a “thought bubble” announcement.
“It was like Joe Hockey had seen that Scott Morrison was out everywhere and thought, ‘Quick, I’d better announce something,’ and went out there with a policy that he couldn’t say exactly how it would work,” the shadow minister said in a fiery interview with Lateline.
“This is the Treasurer of Austarlia, the day before the Budget, as the Budget papers are being printed, with a revenue measure and refusing to tell people what the number is.
“For the Treasurer — and he must’ve received advice on it, but to decide that he was going to keep the number a secret the day before a budget, it was just, it was just weird.”
Outspoken MP Clive Palmer has joined in the criticism, saying “Hockey the Slasher’s” Budget is “not going to be pretty”.
I'm in Canberra now to hear @JoeHockey AKA #HockeyTheSlasher deliver his budget. It's not going to be pretty #auspol #Budget2015
— Clive Palmer (@CliveFPalmer) May 11, 2015
While the government has promised its budget will be “dull”, Deloitte economist Chris Richardson’s prediction it would be “a cross between a horror story written by Stephen King and The Scream”.
That was in reference to the budget deficit, which the forecaster tipped would blow out to $45.3 billion.
Tonight’s budget is make of break for Joe Hockey.
He’s tasked with curbing a ballooning deficit while also announcing sweeteners like tax cuts for small businesses and a multi-billion dollar childcare package.
But already it appears the Government might have trouble getting some of its new plans through the Senate with Labor and the Greens saying they won’t support a 2014 Budget measure to cut family tax benefits in order to fund the new childcare measures.
The announcement follows last year’s deeply unpopular Budget measures, most of which have been ditched or remain in limbo, still locked in the senate.
Yet to announce the budget that’s expected to deliver a deficit around the $40 billion mark, Hockey is already facing criticism for what’s been announced so far, even if his colleague Mr Morrison was the one to announce them.
And then there’s the issue of his job being on the line over it.
As Mr Hockey sweats over the Budget announcement that’s already set up for disaster, are the top five key measures we already know will be in the Budget:
1. Childcare
The government couldn’t wait till tonight to announce its $3.5 billion cash splash on childcare, choosing instead to announce the changes on Mother’s Day. Families earning between $65,000 and $170,000 per annum will be $1500 better off each year from July 2017. The changes, which mean childcare centres receive a single payment to reduce parents’ upfront costs, are designed to encourage mothers to re-enter the workforce sooner.
2. Paid parental leave crackdown
Parents will no longer be allowed to access the taxpayer-funded paid parental leave scheme if their employer offers its own paid leave scheme. This means that almost 80,000 new parents will lose some or all of their parental leave payments. Parents who will miss out on the 18-week minimum wage scheme will be $11,538 worse off. Treasurer Joe Hockey said yesterday that government modelling showed higher-income earners were “double dipping” into parental leave schemes, which he said was “just plainly unfair”.
3. The Netflix tax
People who buy movies, music, games and e-books online will be slugged an extra 10 per cent, with the government vowing to extend the goods and services tax to these “intangible” digital products. So, Netflix binge-watchers, be prepared to pay a little more. Mr Hockey said he would introduce draft legislation with the Budget, aimed at “levelling the playing field”. “It’s plainly unfair that a supplier of digital products into Australia is not charging the GST while some locally are charging the GST,” he told reporters in Canberra yesterday. This measure is expected to raise $350 million over the next four years, all of which will go to the states.
4. Pensions
Eligibility rules for the age pension will be tightened, which is expected to push 91,000 people off the pension and see another 235,000 people’s payments reduced. The part-pension assets test will be cut to $820,000 for couples.
5. Multinational companies on notice
Mr Hockey has plans to crack down on multinational companies that dodge their tax obligations in Australia, announcing plans to recover “billions” in unpaid taxes and harsh new anti-avoidance fines. The treasurer said the government had in its sights 30 companies that divert their profits offshore to avoid paying tax in Australia. Companies that are caught doing the wrong thing will be forced to cough up their unpaid taxes and be could pay 100 per cent of that amount again in fines. “Obviously, they have not been paying their fair share of tax in Australia. In fact, they’ve been paying no tax in Australia,” Mr Hockey said. “Have no doubt the rest of the world is looking at this legislation.”
Here’s what else you can expect from tonight’s Budget:
â— No surplus: Falling iron ore prices have put a Budget surplus out of reach
â— Big spending on infrastructure: Western Australia will be among the biggest winners, with a one-off $499 million payment for nine infrastructure programs already on the record
â— Medical research: Health savings will help fund a Medical Research Future Fund, which will have an initial injection of $10 billion.
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