Federal Treasurer Joe Hockey speaking at the National Press Club in Canberra, Tuesday, Dec. 17, 2013. Mr Hockey spoke on the Mid Year Economic and Fiscal Outlook. (AAP Image/Alan Porritt) NO ARCHIVING
Federal Treasurer Joe Hockey speaking at the National Press Club in Canberra, Tuesday, Dec. 17, 2013. Mr Hockey spoke on the Mid Year Economic and Fiscal Outlook. (AAP Image/Alan Porritt) NO ARCHIVING ALAN PORRITT

Both sides of politics oppose Abbott's planned budget

PRIME Minister Tony Abbott is facing growing opposition over a "deficit levy" proposed for his government's first budget, with the Opposition labelling it a broken election promise on Tuesday.

Mr Abbott on Monday night spoke at the Sydney Institute, outlining future cuts to welfare, including moves to start paring back the aged pension in three years and slashing family tax benefits.

But, in line with his pledge on Monday that "everyone will be involved, including high income earners" in the government's plans to balance the books, the government will introduce the new levy.

The levy is expected to be an extra 1% added to income tax for Australians earning $80,000 or more, and 2% extra for those on more than $180,000.

It forms a key part of the government's aim to ensure, as Treasurer Joe Hockey has said, that "all Australians do the heavy lifting"; an effort to appeal to voters that the budget will not only affect low income earners.

However the focus of Mr Abbott's speech on Monday night was on welfare, with disability pensions, the aged pension, family tax benefits and other government payments under consideration for changes.

Neither Mr Abbott nor Mr Hockey have yet laid out a specific timetable for the proposed changes, or specifically what they will be, with details likely to be left until budget night in two weeks.

But Opposition Leader Bill Shorten said it constituted a broken promise on Mr Abbott's part, after the Prime Minister had pledged before the election to save the budget without introducing new taxes.

Mr Shorten on Tuesday said his party would fight any tax increase, and while the government has the numbers to pass it through the House, it will likely hit a roadblock in the Senate.

Both The Greens and Palmer United Party leader Clive Palmer on Tuesday hit out at the levy plan, proposing to vote it down if possible in the Upper House.

While not ruling the levy in or out, Mr Abbott told 3AW Radio on Tuesday if it was a "permanent increase" in tax, it would not be consistent with his promises, but that sometimes there needed to be "short term pain for some long-term gain".



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