Our budget is no punt, says the government

The government is insisting its budget is not a ‘punt’ riding on the future mining boom and high resource prices, as the Opposition is reiterating.

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Treasurer Wayne Swan and Prime Minister Kevin, during hectic post-budget spruiking today dismissed opposition criticism the forecast is based on the best terms of trade in 60 years.

“This opposition’s always got a colourful line, it just hasn’t got a policy”, Swan said today.

“They cant say when they’ll bring the budget back to surplus, they can’t say what their objectives are…they are really a risk to this country because they are so bad on the economy”, Swan said.

He has attributed the improvement to the government’s two per cent cap on spending growth rather than increased revenue.

It’s all a punt: Abbott

But Opposition Leader Tony Abbott reiterated his ‘great big new tax’ line on the ABC today.

“The high road back to surplus is to restrain spending; the low road back to surplus is a great big new tax,” he told ABC Radio on Wednesday, in reference to a proposed 40 per cent slug on mining companies.

Labor’s third budget forecasts a surplus by 2012/13, down from a current year deficit of $57.1 billion.

That large deficit was expected this year because of the impact of the economic crisis, Mr Tanner said.

Even though there had been a big bounce as a result of better economic conditions and the government’s economic stimulus, the budget was still short about $110 billion in revenue.

“That’s the key reason why we’ve got a couple of years of pretty big deficits,” Mr Tanner told ABC Radio on Wednesday.

Abbott: Tax could backfire

But Abbott says the proposed 40 per cent tax on mining super profits – which the coalition will oppose – could backfire.

“The danger is that the new tax will strangle the growth that it is depending on.”

Tanner flatly rejected Opposition claims the forecast was a gamble relying on a resources boom and high prices for commodities, as Swan had done earlier.

“There’s no basis for these claims,” he said, adding the forecasts were compiled by Treasury in the same way they were calculated under the previous Howard government.

“We don’t interfere in them, we don’t get involved in putting those numbers together.”

Treasury made a range of assumptions that took into account fluctuating factors such as terms of trade and mineral prices, Mr Tanner said.

The Opposition says that the tax cut on mining will strangle growth.

“I don’t think they (the public) want to see their economic future prejudiced by an unnecessary great, big, new tax on mining.”

Abbott to release economic policies ‘in good time’

The opposition’s economic policies would be released “in good time before the election”.

Abbott would not pre-empt what he would say in his budget reply on Thursday night.

He would not say if the coalition was planning a return to surplus even faster than the government.

Mr Abbott chose to ridicule the government’s economic management instead, saying it had delivered Australia’s highest ever deficit of $57 billion, while next year’s expected $41 million deficit will be the second highest.