Gillard Govt scrambling to cover $12 billion hole in budget
PRIME Minister Julia Gillard has revealed her government will spread the pain of a $12 billion fall in tax revenue on budget day next month.
A year on from Treasurer Wayne Swan's "Spreading the Benefits of the Boom" budget, structural problems and higher spending has threatened the government's fiscal position.
Mr Swan said two weeks ago that the $1.1 billion surplus forecast in October had turned into a $7.5 billion deficit in the coming budget.
Ms Gillard said on Monday that the latest Treasury forecasts had also shown a fall in tax revenue of $12 billion this fiscal year.
"It is the failure of growth in tax money to match reasonable predictions that creates the budget challenge," she said.
She said no particular group of Australians would be singled out under cuts to the budget.
"What I can assure you is that we will take a Labor approach to the burden sharing that I have described in the speech today," she said.
"A Labor approach that understands that people come with different capacities to the task.
"But also a Labor approach that understands that if we look right across our society and ask everyone to make some contribution then it lightens the load for everyone."
Ms Gillard said despite likely cuts, the government's multi-billion-dollar promises for the Gonski school reforms and the National Disability Insurance Reforms "would not be jeopardised".
But Shadow Treasurer Joe Hockey said despite the supposed fall in revenue, the government still had a $25 billion rise in tax revenue since last year - or a 6% year-on-year.
He said many businesses and families would be happy to get a 6% increase in revenue, and the budget problem was due to spending increases, rather than a fall in revenue.
"They're still planning on receiving a 7.6% increase in revenue this year; the problem is they are reckless in spending," Mr Hockey said.
"They allocated spending against the carbon tax that was more than the carbon tax was expected to collect, yet now they cry crocodile tears."
The federal budget will be released on Tuesday, May 14.