BUDGET 2013: Abbott sidelines super to bankroll carbon tax sweeteners

AAP, with a staff reporter 

Tony Abbott has pledged to delay a hike in the superannuation guarantee to bankroll the retention of tax cuts and pension and benefit increases linked to Labor's carbon pricing regime. 

In his budget-in-reply speech Mr Abbott outlined almost $5 billion in savings, with most of the cuts to come from superannuation changes.

However, Mr Abbott repeated Coalition promises to abolish the carbon and mining taxes. 

If the opposition wins government in September, it will discontinue the low income superannuation contribution that is part of Labor's mining tax package, to save just under $1 billion.

It will delay by two years the phased increase in the superannuation guarantee charge from nine per cent to 12 per cent to 2021, to save $1.1 billion a year.

Finance Minister Penny Wong said the superannuation changes would "take an axe" to the superannuation savings of 8.4 million Australians.

All the savings outlined in Mr Abbott's speech would go to retaining tax cuts and fortnightly pension and benefits increases tied up in the carbon tax compensation for households promised by the government.

"The carbon tax will go but no one's personal tax will increase and no one's fortnightly pension or benefit will reduce," Mr Abbott said.

Ms Wong described Mr Abbott's measures a "sneak peek" of the savage cuts he would implement if he becomes prime minister.

Mr Abbott told parliament on Thursday night that "thanks to Labor's poor management over five years, there is now a budget emergency."

Mr Abbott would cut the public service payroll by 12,000 over two years, saving $1.75 billion and the 6,250 increase in Australia's humanitarian intake and the Clean Energy Finance Corporation would both go.

Treasurer Wayne Swan handed down the federal budget for 2013/14 on Tuesday and projected deficits for this financial year and the next two, before heading into the black from 2015/16.

He announced $43 billion of savings measures over the forward estimates, including the abolition of the $5000 baby bonus to parents, to help fully fund Labor's disability care and schools funding programs and make up for a revenue slump driven by the high Australian dollar.

While the opposition planned to support the government's savings measures, a Coalition government would not "shirk the hard decisions" to get back to surplus, Mr Abbott said.

"At least for a first term, until we're on an honest path not just to surplus but to repaying debt, an incoming Coalition government will resist new spending commitments that aren't fully funded, nearly always by offsetting expenditure reductions," he said.

Mr Abbott also repeated Coalition promises to cut business red tape, set up a commission of audit and stop the asylum-seeker boats.

Ms Wong described the promised commission of audit as a "secret inquiry": "Which would mean savage cuts like the ones Queenslanders are already seeing".

Ms ong denied Mr Abbott had blunted Labor attacks on the Coalition, and its lack of budget detail.

"If anything I think what it's done is made very clear the values that drive Mr Abbott when he comes to his cuts," she said.

"It's given Australians a very clear message about the sort of approach he'd take - a sneak peak of the savage cuts to come were he ever to become prime minister."

Australian Greens leader Christine Milne dismissed the federal budget as a plan without a broad vision that's beset by confusion.

But she says the coalition's alternative is even worse.

"Mr Abbott's alternative is worse, full of rhetoric but devoid of detail, the very magic pudding against which Mr Hockey railed."

More from Business Spectator


Please login or register to post comments

Comments Policy »
This talk of discontinuing the low income superannuation contribution that is part of Labor's mining tax package, how can it be discontinued when it hasn't been started yet? Just like Labor say that the money they are taking away in tax benefits isn't really taking away as it hasn't been given yet. Good for the goose and all that, n'est-ce pas? lol :o)
Good, why should the government decide how the money I have earned should be saved/spent?
"Finance Minister Penny Wong said the superannuation changes would "take an axe" to the superannuation savings of 8.4 million Australians." And there I was thinking that it was Labor that took the axe to the superannuation savings when they reduced concessional contributions to $25,000 pa. Labor had six years in which to improve super. They could have introduced compulsory employee contributions - why Australia does no have this is beyond comprehension. They could have removed the work test for people 65 and over. These are just a couple of improvements that Labor could have introduced when they first came to power, but they missed the opportuniy to improve super.
Reminds me of when Rudd adopted the Coalition tax cut plan with the spin of 'Howard Lite.' So perhaps Tony is trying for a position of 'Labor Lite" with such measures.
Brett McGregor, you have hit the nail on the head. Super is a con. A way of keeping people trapped in the debt cycle because they can't have access to a huge chunk of their own money. That money is then controlled by fund managers, and in the case of industry funds, goes to supporting unions and their influence on the now pathetic Labor party. How is it that the media never report super for the rort against the Australian people that it is. And why did Abbott ever agree to the super rate being increased to 12%, completely against everything the Libs stand for?
What struck me last night watching Tony Abbott eyeball Julia and Wayne, was that the "real Julia" was back on display; I could literally see the venom and hatred spitting out of her, as she squirmed every time Abbott made a telling blow to her budget's credibility. She's a real jeckyl & hyde this one ! not once ounce of statesmanship in her. only another 120 days.
The Greens Leader doesn't like the budget because she understands nothing about the fiscal requirements of running a country. It is beyond imagination how our great country would end up with her at the wheel. She would make Julia look intelligent.
Come on Bryan - Nothing would make Julia look intelligent, although the Greens do try very hard.
Why does the reporter mention Wong at all? She can offer nothing to the article.
The budget reply is an incremental first step towards what I hope is the road towards more self-sufficiency, less expectation that the State will provide and a better understanding that the political class (especially in Europe but increasingly in Australia under Rudd and Gillard) are interfering far too much in people's lives. When governments spend each waking hour writing regulations here and showering cash there, then employing more and more of the population to write even more regulations and administer further showering of cash, rent seeking and do-goodism becomes totally unmanageable.
Penny along with her boss, haven't a clue about budgetary control. Growth, is merely a moving target. As a rule of thumb, feed back of actual monthly takings should be a truer guide on what to expect and thus safely plan forward expenditure. During the age of computers, being caught the way they produced deficit after deficit demonstrate they are not even efficient bookkeepers.