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Julia Gillard hits families, but won't stop Gold Pass travel scheme

| 30.11,11. 09:48 AM |

Julia Gillard hits families, but won't stop Gold Pass travel scheme

November 30, 2011

MOTHERS who give birth before September 1 will beat a $437 cut to the baby bonus being imposed by the Government to help deliver its promised Budget surplus.

Treasurer Wayne Swan yesterday said the bonus for stay-at-home parents would be cut from $5437 to $5000 and then be frozen for three years to save the Budget $358 million.

There is no change to the paid parental leave scheme for working parents, worth about $590 a week before tax for up to 18 weeks.

Was Swan right to reduce the baby bonus? Have your say below

The surprise cut to the baby bonus came as Mr Swan also said foreigners would pay more for visas and $2.1 billion worth of promised tax breaks, including incentives for savings, would be delayed.

The Government will take a $1.5 billion axe to the public service, which Finance Minister Penny Wong said would mean slashing travel, consultants, hospitality and advertising, but unions said could mean 3000 job losses.

Mr Swan unveiled net cuts to spending of $6.8 billion as he revealed a $15 billion blow-out in the deficit for this financial year to $37 billion due to Europe's financial turmoil causing "storm clouds on the global horizon" and weaker economic growth.

Mr Swan insisted the cuts were "fair and equitable" as he revealed the $3.5 billion surplus he announced six months ago for 2012-13 would be now just a wafer-thin $1.5 billion. Economists warned it could easily be wiped out.

The Treasurer rejected suggestions he had inflicted pain and brought forward some spending and delayed other outlays just to meet a political promise to deliver a surplus.

He said it was important to send a message to the world that Australia had a strong economy

But, despite the pressure on the Budget, the Government made no change to the Gold Pass free travel scheme for retired politicians, although Special Minister of State Gary Gray said he wanted to scrap it because it was"an unjustifiable perk".

The Budget update revealed economic growth is tipped to be 3.25 per cent, down from the 4 per cent expected six months ago. The jobless rate is tipped to rise from 5.2 to 5.5 per cent.

Mr Swan said while unemployment would "tick up a little", it was much lower than the 9-10 per cent jobless rates in the US and Europe, and in Spain, where 50 per cent of young people were out of work.

Mr Swan was buoyed by ratings agency Fitch upgrading Australia to AAA, the same level as Moodys and Standard & Poor's.

He defended cutting the baby bonus, saying it had risen from $3000 just a few years ago and it was time to "reset" it to make the payment sustainable over time.

He said the change would not happen until September "so people clearly know what it is going to be in nine months' time".

The Government defended its record for families saying this year it had introduced paid parental leave, increased family benefits for parents with kids aged 16-19 and delivered more childcare assistance.

Opposition Leader Tony Abbott attacked the change to the baby bonus.

"This is a rip-off of the forgotten families of Australia. Let's not forget that the baby bonus is there to help stay-at-home mums and I think this is a Government which has never had much respect for the stay-at-home mums," he said.

Opposition finance spokesman Andrew Robb accused the Government of creating an "illusory surplus".

But the Opposition refused to say if it would oppose any of the cuts or announce what savings it would make to deliver its promises.

Herald Sun

(Votes: 0)