PM coy on budget rumour of debt levy

Tony Abbott has promised to be fair and equitable when meting out some of the tougher measures in the May 13 budget.

However, the Prime Minister has refused to comment on reports he is considering a debt levy to tackle the deficit.

Mr Abbott said the government wouldn't "squib the challenge" of fixing the budget, when asked if the Coalition would soon introduce what Labor has dubbed a "deceit tax".

A news report on Sunday hinted that, based on the Queensland flood levy, a "one-off" impost on high-income earners would be a feature of the budget.

Asked about this, Mr Abbott repeated his well-worn mantra that he would not rule anything in or out. But he said the Coalition had committed to fixing the "fiscal disaster" left by the Labor government.

"Now we are going to do it in ways which are faithful to the commitments that we made to the Australian people," he said.

"We will do it in ways which are fair, which are equitable, and which I believe will be seen to be fair by the Australian people."

Labor said the levy would breach a pre-election pledge not to impose new taxes.

"Make no mistake, this will be the biggest broken promise of all," shadow treasurer Chris Bowen said.

"Tony Abbott told the Australian people he would cut taxes and he specifically said he would introduce no new taxes."

Mr Bowen accused Treasurer Joe Hockey of creating a "conflated budget emergency".

"But that doesn't justify a tax on Australian families who would pay the cost for this breach of promise from Tony Abbott," he said.

But Mr Abbott said the government would keep its election commitments.

The levy is the latest unpopular measure tipped for Mr Hockey's first budget. Since the beginning of the year the government has been forced to contend with GP co-payment policy fears.

Last week the Treasurer said an increase in the pension age was inevitable but he wouldn't confirm that the budget would lift it to 70.

Clive Palmer said on Sunday that he wouldn't support lifting the age when the Palmer United Party along with other crossbenchers hold the balance of power in the Senate.

"I just couldn't employ Joe Hockey or Tony Abbott at 69, no matter how competent they are," Mr Palmer said. AAP


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