Wayne Swan speaks at Parliament House today. Picture: Alex Ellinghausen
The federal government has slashed spending and increased charges by a combined $4 billion to reach a forecast surplus of $1.1 billion this financial year, which is $400 million less than forecast at the May budget.
The savings include cutting the baby bonus to $3000 for the second and each subsequent child and reducing the level of rebate the government will provide for private health insurance.
And to maintain surpluses over future years, corporations will have to pay company tax monthly, rather than quarterly.
''This will ensure that instalments are more closely aligned to fluctuations in these businesses' income,'' says the mid-year budget papers, released this morning.
The company tax changes will bring in $8.3 billion in the next three years, including $5.5 billion next financial year.
Declining commodity prices have led to a crash in forecast receipts from the mining tax from a $13.4 billion over four years to $9.1 billion.
The fall in commodity prices has also resulted in a crash in company tax collections. Combined with the mining tax, a blowout in the cost of asylum seekers and other changes, the budget has lost $4 billion for this financial year since the May budget and $21 billion over four years.
Today's Mid-Year Economic and Fiscal Outlook contains more than $16.4 billion in savings alone.
Finance Minister Penny Wong said that the mid-year budget update showed the government was returning to surplus.
"In preparing the MYEFO, the government has again made responsible savings and prioritised important social reforms in line with Labor values of fairness, equality and opportunity and to protect low and middle-income earners and the most vulnerable in our community," Senator Wong said in a statement.
Families Minister Jenny Macklin said the baby bonus change, for babies born on or after 1 July next year, recognises the fact that families purchase the big-ticket nursery items when their first child is born.
"Most families don't face the same upfront costs for a second or third child as they do for the first. Expensive items such as the cot, pram, change table and baby capsule are generally reused for younger siblings," Ms Macklin said.
"It's important that the family payment system is sustainable into the future."
