Natural disasters are tipped to blow out Australia's budget deficit to more than $50 billion.
Treasurer Wayne Swan has hinted the deficit will increase, but has not confirmed whether it will top the $50 billion mark. "If your growth drops significantly in 2010-11, that has 2011-12 implications," Swan told The Australian.
Despite the expected deficit increase, the Federal Government has reaffirmed its commitment to bring the budget back into surplus in 2012-13.
Last week, Defence Minister Stephen Smith announced that the Australian Defence Force would reduce its civilian staff by up to 1000 people in a move that is expected to generate $300 million in savings over three years.
University students are also facing increasing cost pressures, with students expected to have their up-front HECS (Higher Education Contribution Scheme) payment discount of 20 per cent halved. This is projected to save the Government up to $500 million over four years.
While further austerity measures are likely, Swan told the ABC this morning that up to 6.5 million people will be eligible to receive low income tax offsets to assist with cost of living pressures.
Shadow Treasurer Joe Hockey has criticised the Government for "media spin" with its pre-budget statements. "I suspect when we see the details of this legislation that all of those truckies out there, all of those sparkies, all of the builders, people that live in their cars for work are going to end up paying more tax," he told Steve Vizard on Melbourne radio.
"You don't just claw back a billion dollars without some pain being inflicted on people. I suspect that the people that do use their cars the most often are the ones that are going to end up paying."
Stay in touch with all the key announcements from tonight's Federal Budget at our special 2011 Federal Budget microsite: www.lexisnexis.com.au/federal-budget