News National Formguide: How much of the budget will survive?

Formguide: How much of the budget will survive?

Tony Abbott
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As MPs return to Canberra for another week of bruising budget debate, voters could be forgiven for imagining they’re living in a Rumsfeld-ian universe.

It was Donald Rumsfeld, former US Defence Secretary, who famously declared in 2002 that there were “known knowns, known unknowns, and unknown unknowns”.

While these comments were about Iraq, Rumsfeld could have just as easily been describing the fate of Joe Hockey’s first budget.

With the Opposition, the Greens and some crossbenchers hardening their stance against key reforms, the outcome of the budget is uncertain. Highly unknown, even.

Prime Minister Tony Abbott, on Saturday, was insisting he would get his first budget through, with only minor tweaks. “Sometimes there might be a little refinement here, a little refinement there, but governments get their budgets through,” the PM told reporters in Sydney.

But the Senate looms as a major obstacle with Labor, the Greens and key crossbenchers – including Clive Palmer’s ragtag bunch – to play hardball over key measures. Concessions and compromise will have to be offered if the Coalition doesn’t want to see its budget gutted.

Deficit Levy 

Supporters: Coalition, ALP
Opponents: Palmer United Party (PUP)
Chances of survivalAlmost certain

The ‘temporary’ deficit levy has already passed the House of Representatives with the support of Labor. It will get through the Senate, meaning that around 400,000 taxpayers earning $180,000 will pay a 2 per cent levy from July 1.

Medicare Co-payment 

Supporters: Coalition
Opponents: ALP, Greens, PUP
Chances of survivalSlim

Mr Abbott was out ‘selling’ his plans for a $20 billion medical research fund on the weekend. The high-tech fund relies on the Government securing passage of its $7 co-payment, which is due to come into force from July 2015. The Government’s Department of Human Services has already begun informing people about the co-payment, which will force up the price of visiting the GP. But it is far from certain to pass the Senate. Labor, the Greens and Clive Palmer’s PUP appear likely to oppose, unless the Government is willing to offer significant amendments, perhaps by removing the co-payment for children and pensioners.

newdaily_140514_petrolReturn of petrol excise indexation

Supporters: Coalition, Greens
Opponents: ALP, some cross-benchers
Chances of survival: Strong

The increase in fuel excise will raise around $2.4 billion between now and the next federal election. It reverses the 2001 decision by John Howard to ‘freeze’ petrol excise. Greens’ leader Christine Milne has said the balance-of-power party will back the budget measure, although some in her party want the extra revenue tied to public transport funding. This debate may still have a way to run.

Higher education reforms: fee deregulation and student loans

Supporters: Coalition
Opponents: ALP, Greens
Chances of survival: Unknown

Education Minister Christopher Pyne was out arguing for his higher education reforms on Sunday, arguing that competition will drive prices down – rather than inflate the costs of university courses. The Minister will have a tough time winning that argument in the parliament though, with Labor and the Greens concerned that deregulation will see the price of many courses soar. This will be a rip-roaring debate in the parliament and it is far from certain that all of the measures will be supported.

Family Tax Benefit payments

Supporters: Coalition
Opponents: ALP
Chances of survival: Unknown

Tony Abbott’s attempts to tighten ‘middle-class welfare’ remains in doubt with Labor opposing a two-year freeze on welfare ‘indexation’. This would blow a hole of $2.6 billion in the budget. The Opposition formally came out against the budget initiative last week, after earlier signaling it may support the move. Labor’s families spokeswoman Jenny Macklin made it clear that Labor viewed the budget measure as an attack on the poor. “We want to make it clear to those families in Australia, especially the poorest families in this country that Labor will stand up for them,’ Ms Macklin said. There is scope for the Government to win support for other changes, including a reduction in the income threshold of $150,000 for family payments.


Lifting the pension age to 70

Supporters: Coalition
Opponents: ALP, Greens
Chances of survival: Not good

The Coalition’s call for Australians to work till they drop – by increasing the pension age to 70 – faces significant obstacles. While the changes won’t come in until 2035, the opposition has been swift and substantial.

Like most of the big ticket budget reforms, the Government is likely to have to offer compromise – if it’s to have any chance of securing parliamentary backing. That fact, at least, is a known known.

Steve Lewis has 22 years experience in reporting Canberra politics, and is a senior adviser with Newgate Communications. He is also the co-author of the best-selling political novel, The Marmalade Files, and the forthcoming The Mandarin Code.

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