Coalition announces Energy Assistance Payments as Minister flags more budget surpluses

Finance Minister says first budget surplus in more than a decade is built on cautious assumptions, calls energy bill scheme affordable.

Prime Minister Scott Morrison at Penrith Valley Regional Sports Centre in Sydney on Saturday. Picture: AAP

Australia’s first budget surplus in more than a decade is built on “very realistic, very cautious” assumptions about future growth, with more surpluses to come.

Finance Minister Mathias Cormann says the Coalition had taken a conservative approach to forecasts on commodities like iron ore in Tuesday’s federal budget.

“Our forecasting assumptions are very realistic, very cautious, very responsible,” Senator Cormann told Sky News on Sunday.

“In the first few years of coming into government we had to write down revenue by more than $180 billon compared to the revenue forecasts that we inherited.”

Senator Cormann said looking at the 2016/17 and 2017/18 final budget outcomes, the Coalition outdid its own predictions.

“Our actual performance against budget was materially better than what was forecast at budget time and principally on theback of stronger economic growth, stronger employment growth,” he said.

“From 2019/20 onwards our forecast and projections are for a surplus to be maintained all the way through the medium termover the next decade.”

Senator Cormann confirmed legislation would need to be passed for a one-off energy payment to struggling households, announced by Treasurer Josh Frydenberg this morning. Budget forecasts showed “it was obvious we could afford it,” he said.

It means the government needs support from Labor or the crossbench to secure the measure in the final sitting week before the election is called.

“The government’s intention is to ensure that this additional energy supplement is passed as swiftly as possible so it can be delivered to 2.4 million pensioners and a series of other eligible welfare recipients across Australia in the 2018-19 financial year,” Senator Cormann said.

“The timing of the election is a matter for the Prime Minister and I will leave that for him to announce at the appropriate time but at this stage we are focused on what is in front of us.”

Mr Frydenberg says he will deliver a responsible budget on Tuesday, after announcing the government will deliver cheques to four million welfare recipients to help pay their energy bills.

The Treasurer said now was “not a time for cash splashes” as he refused to say whether there would be more cash handouts to voters or further income tax cuts in his first budget.

“This is not a time for cash splashes. This is a time for responsible spending, targeted spending, in key areas that lifts the productive capacity of the economy,” Mr Frydenberg told Nine Network’s Weekend Today.

“What I can say is that this budget is focused on growing the economy so we can secure a better future for all Australians and to repair the nation’s finances given we were left enormous debt by Labor.”

Mr Frydenberg announced this morning there would be a one-off payment of $75 for singles and $125 for couple

.@MathiasCormann: Power prices are much lower than they would have been if we hadn't abolished @AustralianLabor's carbon tax.

MORE: https://t.co/wbUEOu5Hu5 #SpeersOnSunday pic.twitter.com/K0klApufiQ

— Sky News Australia (@SkyNewsAust) March 30, 2019

s to help pay their electricity bills.

The payment will be made to pensioners, veterans, single parents and the disabled.

“This is acknowledgment that there are cost of living pressures and this support is going to go to around 4 million Australians: aged pensioners and those on the disability support pension, people who are on carer payment, single parenting payments and veteran payments,” Mr Frydenberg said.

“This is money going to go into people’s pockets to help meet the cost of their next power bill. At the same time we are taking action on a number of fronts to reduce energy prices. Last year we saw prices come down in July, on January 1 we saw standing offers come down by about 15 per cent and then from July 1 we are putting in place a default price.”

Mr Frydenberg played down the prospect the budget was already in surplus, declaring there had been economic headwinds since the Mid-Year Economic and Fiscal Outlook.

“In terms of 2018-19 we have faced both pre-MYEFO and post-MYEFO a number of spending challenges including in relation to the drought and the floods in Queensland. As well, of course, extra GST payments to the states.”

Scott Morrison this week confirmed the government would unveil a surplus for the 2019-20 financial year and there was speculation the budget may already be in the black.

Bill Shorten has labelled Josh Frydenberg’s energy cash giveaway an “election con”, declaring the government was trying to make voters forget it does not have an energy policy.

The Opposition Leader said the one-off cash payment of $75 for singles was equivalent of just $1.45 a week over a year.

“This government, though, seems to think that energy prices only go up in election years,” Mr Shorten said.

“It’s better than nothing, but it’s not an energy policy. $1.45 a week for 12 months is not an energy policy, it’s an election con. Does anyone would think you’d be getting this if you weren’t six weeks before an election?”

Mr Shorten also confirmed Labor would deliver a budget by September it wins the May poll.

“If Labor is successful, we’ll bring down a budget in the third quarter this year,” Mr Shorten said.

“Chris (Bowen) is saying it’s a major economic statement, that’s spot on.

“We’re ready because we’re stable. We’re ready because we’re united. We’re ready because we have a more talented team. We’re ready because we have done the policy work. We’re ready because we understand that everything in Australia is going up except people’s wages.”

Our tax cuts are bigger: Bowen

Opposition Treasury spokesman Chris Bowen urged the government to use the budget to match Labor’s bigger tax cuts for people earning $125,000 or less.

“The government has a lot of catching up to do. We have bigger tax cuts, 75 per cent bigger, than the one the government has offered for every Australian who earns less than $125,000 a year. That’s ten million Australians. They have first got to match that. That’s a key test,” Mr Bowen told the ABC this morning.

“We’ll look at the budget on Tuesday night and in the days following through an air of responsibility and, obviously, if there are sensible things which help the cost of living, we’ll support them. But we’ll have to see. But first, the government has a serious amount of catching up to do with Labor’s agenda.”

"The Treasurer changes from Budget-to-Budget, it seems. But the fact that they don't meet the wages forecast doesn't change."

Shadow Treasurer @Bowenchris says the government has "no plan" for wage growth. #Insiders #auspol pic.twitter.com/7Scz1f4W3y

— Insiders ABC (@InsidersABC) March 30, 2019

Mr Bowen said the government was trying to change its story on the eve of an election after “six years of chaos”.

“They’ve doubled the net debt. They told us that there was a budget emergency six years ago. They haven’t made the tough decisions to get the budget back into surplus. They’re riding a wave of very good international economic circumstances,” Mr Bowen said.

“Of course, we welcome a budget surplus but we’ve committed to have bigger budget surpluses over the forward estimates based on last year’s budget projections. That’s the sort of surplus that Australia needs.”

Mr Bowen said a Shorten government would deliver an economic statement in the third quarter of the year if Labor wins the election.

“If we win we will bring down an economic statement in the third quarter of the year, which will in effect be the first budget of a Shorten Labor government. We need to reset the economic settings,” Mr Bowen said.

“We need to update the forecasts with the new government in place, and then, of course, we would return to the normal budget cycle of budgets in May from 2020 onwards.”

- with AAP