Budget 2015 to be kinder on families

THE Government’s cash flows are shrinking but Tony Abbott is promising he won’t slash and hack spending in his second Budget next year.

PM Abbott Presser

THE Government’s cash flows are shrinking but Tony Abbott is promising he won’t slash and hack spending in his second Budget next year.

And Treasurer Joe Hockey is on the same page — he doesn’t want to scare voters out of spending and further reducing tax revenue from retail sales.

There won’t be the strident demands for families to make the big sacrifices which left households complaining of unfair treatment in the first Abbott Budget last May.

And there won’t be a mini-budget later this month on release of the economic progress report MYEFO — the Mid-Year Economic and Fiscal Outlook statement.

The promises are a sign the political loss from the Government’s economic demands in the May 2014 Budget are being keenly felt by the Prime Minister.

Prime Minister Tony Abbott fields a wide range of questions from the media at a press conference in Parliament House, Canberra.

The Government will tone down the emphasis on families, and tone down its economic language.

“We used very strong language prior to the election to describe the Budget problem,” Prime Minister Abbott conceded yesterday.

However the deficit it vowed to eliminate is piling up as crashing commodity prices reduce the government’s tax revenue.

A senior Government source has told news.com.au the Budget will not “follow iron ore prices down” — meaning there won’t be cuts to parallel the revenue decline.

The next Budget won’t “follow wages down” as the fall in income tax from small pay rises also shrinks revenue.

Treasurer Joe Hockey responds during Question Time in the House of Representatives, Federal Parliament, Canberra.

But there will be greater emphasis on “efficiencies” in Government agencies.

The Government has lost a significant amount of good will to the hostile reception of its first Budget and Prime Minister Abbott is attempting to regain it in the lead up to next May.

He and Treasurer have foreshadowed a quieter Budget without the war on “entitlements” and boosts to household expenses which marked the Budget last May.

Treasurer Hockey told Parliament yesterday consumers are set to buy more with confidence back at long-term levels, and that there was a prospect of greater employment.

“According to Dun and Bradstreet, business-sales expectations have increased to 14-year highs,” said Mr Hockey.