Budget 2013: what we know before the papers are delivered

Entrapment, as Sean Connery famously mused in the 1999 film of the same name, is “what cops do to thieves”. And that’s what Wayne Swan’s been accused of doing to an incoming Abbott government this morning as the Treasurer moves to spend a Hollowmen-esque “$100 billion” on nation-building tied to the structural savings to pay for it.

What we know so far can be divided into drops delivered to a slavering press pack (like the $100 billion) and good journalism, like The Australian Financial Review‘s Laura Tingle and Marcus Priest’s May 8 exclusive on the dumping of tax cuts linked to the carbon price and Phil Coorey’s foreign aid scooparama.

The competition for secret information between the two national dailies has been extreme — Crikey understands Australian editor-in-chief Chris Mitchell has made his displeasure known at getting scooped by The Fin each morning as the detail drips out.

So what’s the lay of the land one hour before the boxes of budget papers are eagerly ripped open in the lock-up? A Crikey analysis reveals 31 preemptive items. First, the basics …

Overview:

• Total budget size: $390 billion
• Predicted surplus (from the 2012-13 budget papers): $1.8 billion
• Expected deficit: between $16-17 billion
• Expected tax writedown in 2012-13: $17 billion
• Expected tax writedown in 2013-14: more than $20 billion
• Total shortfall from 2013 to 2016: between $60-80 billion
• Expected return to surplus: 2016-2017
• Growth rate: expected to fall to 2.75% from 3%, costing $1.75 billion in lost revenue in 2014-15; growth should average 3% in 2012-13 and 2.5% in 2013-14
• Inflation: 2.25% in 2012-13 and 2.5% in 2013-14
• Mining tax revenue: forecast 2012-13 of $2 billion, actual $800 million.

• $3.3 billion or 0.5 percentage point increase to the Medicare levy for DisabilityCare from July 1, 2013
• Backflip on measures linked to the Minerals Resource Rent Tax that formed part of last year’s $3.6 billion “spreading the benefits of the boom” package: withdrawal of rate increase in Family Tax Benefit A to come into effect on July 1, saving $1.8 billion (was slated to increase to a maximum of $300 for families with one child, and $600 a year for families with two or more children) — but $1 billion income support supplement for low-income households and the schoolkids bonus and the increase in superannuation guarantee from 9% to 12% by 2020 stays
• Backflip on tax cuts linked to the carbon tax: axing of $1.4 billion in tax cuts promised last year; a further increase in the tax-free threshold to $19,400 in 2015 from $18,200 in 2012 (although that is triple the previous tax free threshold) because of expectations of 50% declines in carbon tax revenue when the government’s scheme is linked to the floating European carbon price; about $100 million in mooted cuts to clean energy package including renewable energy agency, biodiversity funds, energy efficiency grants and carbon initiatives
• $580 million over four years in cuts to public service executive branches except for Defence and ASIO (400 jobs)
• Cuts to foreign aid to save $3 billion (current annual aid budget is $5.2 billion but 7% or $375 million is spent on onshore asylum seeker costs, capped for 2013-14); total aid will increase by $500 million to $5.7 billion or 0.37% of GNI — the 2014-15 Millennium Development Goals for 0.5% of GNI deferred for another year until 2016-17
• $2.3 billion cut to higher education funding to partly pay for the Gonski reforms.

• $68 billion over 10 years for DisabilityCare
• $26 billion over 10 years for Gonski and school education
• $3 billion in additional funding for road upgrades: an extra $525 million for Melbourne’s M80 orbital project and blackspots; $718 million for Brisbane’s Gateway; $400 million for Sydney’s F3-M2 link; $1.8 billion for WestConnex (M4 extension and tunnel in Sydney’s inner south-west); $448 million for upgrades to Adelaide’s South Road
• $100 million for more postgraduate university places; $84.6 million over four years or $97.1 million over five years for extra diploma and masters level places
• $10 million for a program to protect Australians from asbestos-related disease administered by the Asbestos Safety and Eradication Agency
• $300 million to increase the amount that can be earned before the dole starts tapering off (allows recipients to earn an extra $38 a fortnight to $100)
• $55 million for expanded breast cancer screening
• $19 million for prostate cancer screening
• $20 million for the Fair Work Commission to tackle anti-bullying.

• Dumping of carry-back reforms, currently in bill form before parliament but yet to be passed
• $2 billion save to tighten thin capitalisation rules and crackdown on “debt dumping” (foreign firms using local debt as a tax deduction)
• Further tightening of the rules around the Baby Bonus; already $500 million in cuts over four years announced in MYEFO in October (second and third child get $3000 instead of $5000)
• Mining exploration tax breaks may be tightened
• Cuts to Medicare and the Medicare Safety Net
• Cuts to the childcare rebate.