Australian PM reveals plans for ‘substantial’ spending cuts

30 Jan 13
Falling tax revenues mean the Australian government will have to make ‘tough’ decisions to meet its fiscal targets and fund its education and disability support policies, Prime Minister Julia Gillard said today.

By Nick Mann | 30 January 2013

Falling tax revenues mean the Australian government will have to make ‘tough’ decisions to meet its fiscal targets and fund its education and disability support policies, Prime Minister Julia Gillard said today.

In a speech where she also announced a general election would be held on September 14, Gillard said her government would introduce ‘substantial new structural savings’. These would ‘maintain the sustainability of the budget’ and also make room for major policy priorities.

Reduced company profits and falling domestic spending meant tax revenues were ‘significantly lower’ than forecast, Gillard noted.

‘Compared to the public revenue which was forecast on the eve of the global financial crisis in 2008, what has actually been collected in tax since is far lower – on average, lower by more than $30bn every year,’ she said.

‘Even compared to what was forecast once the worst of the global financial crisis had passed, annual revenue is tens of billions of dollars below what was expected.’

This pressure meant it was the ‘wrong time’ to spend without outlining long-term savings strategies, Gillard explained.

‘Put another way, we are in an era when new structural calls on the budget need to be associated with new structural savings,’ she said.

‘This is the approach the government will take as we make sure every child gets a great education and every Australian can live with the greater peace of mind that comes with knowing that if they or someone in their family become profoundly disabled they will get a fair chance and a fair deal.’ Doing so would involve ‘tough, necessary decisions’, she added.

The government plans to move forward with a new funding model for schools, the National Plan for School Improvement, in April, she revealed.

‘I will put to April’s Council of Australian Governments the critical decisions to implement the National Plan for School Improvement: quality teaching and learning, power for principals, new transparency on results and in return, the future funding arrangements which will meet the needs of every student,’ Gillard explained.

Then, on July 1, the government plans to launch the National Disability Insurance Scheme, aimed at improving disability support arrangements nationwide.

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