Few Surprises In Federal Budget; Pensioners Big Winners; Modest Surplus Forecast
May 22, 2001
The Budget delivered tonight by the Federal Treasurer, Peter Costello, contains few announcements that had not already been leaked to the media in recent weeks.
The Budget surplus is forecast to be $1.5 billion, somewhat higher than predicted.
Economic growth is forecast to be 3.25%. Inflation is predicted to be 2.25% and unemployment is expected to increase to 7%.
The Budget is intrinsically political, as one would expect from a government behind in the polls and facing an election by the end of the year.
Small business will benefit from a number of measures, including the ability to claim input tax credits on motor vehicles from midnight tonight.
Confirming decisions already announced, the Company Tax rate will drop to 30% from 34% on July 1. Financial Institutions Duty will be abolished.
But the big winners in the budget are old-age pensioners and self-funded retirees. An immediate payment of $300 is being made to pensioners to compensate for the effect of the GST. The income threshold for retirees is also being increased and access to telephone concessions and health cards has been made easier.
Voters over the age of 55 make up a core component of the coalition's support base and these measures are a direct attempt to woo them back to the government.
Government Dares Opposition To Reject Extra Money For Pensioners
A somewhat undergraduate dare was issued tonight by the Federal Treasurer, Peter Costello. Announcing a one-off payment for pensioners of $300, Costello said that legislation had to be passed in the next 3 days if the payment is to be made in the next pay period.
He dared the Opposition to delay the legislation.
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