Budget surplus coming – Morrison
TREASURER Scott Morrison will make new migrants wait longer to claim welfare benefits, in a key budget-savings measure announced yesterday.
Handing down the Mid-Year Economic and Fiscal Outlook in Canberra, Mr Morrison said the Federal Budget was on track to return to surplus – of $10.2 billion – by 2020-21.
Revenues are up – thanks to more jobs created and more people paying taxes – debt is lower than forecast just six months ago and GDP is on an upward trajectory, despite slowing since the May projections.
But wage growth is still sluggish, meaning families will continue to consider that the high cost of living and exploding electricity bills are major pressure points.
Mr Morrison said he was bringing the budget back under control.
“Our economy is strengthening. Growth and jobs are rising and the better days ahead the Government spoke about in the Budget are emerging ... and although real GDP growth has been slightly tempered in 2017-18, the trajectory is upward,” he said.
The Treasurer outlined a range of new measures to cut spending.
In a move expected to save $1.2 billion over four years, new migrants will have to wait three years after arriving, instead of two, before being eligible to claim welfare benefits including the Family Tax Benefit, Paid Parental Leave and the Carer Allowance.
About $1.5 billion will be saved from the Disability Support Pension as a result of a crackdown on those believed to be rorting the system.
In another measure, families owing a debt to Centrelink will have it taken out of their Family Tax Benefit payments, saving $405 million over four years.
The Turnbull Government has dropped the higher education reform measures from the May budget that it was unable to negotiate through the Senate.
But universities will no longer be able to enrol vast numbers of new students, with the government to cap funding for student places after an explosion in enrolments since the Gillard government uncapped numbers in 2012.
This cap on federal funding per student, to save $2.3 billion over four years, was a way for Mr Morrison to find savings without legislation.
Instead, the mid-year update shows the government will freeze funding for bachelor-level degrees for two years and subject universities to performance targets to determine the growth in funding from 2020, which would also be capped.
Wages are expected to grow more slowly than forecast in the May budget, with the mid-year update revising down increases over the next two years.
Wages grew at 1.9 per cent over the year, compared to a forecast of 2.5 per cent. The renewed forecast is 2.75 per cent in 2018-19. Earlier estimates had forecast wage increases would accelerate to as much as 3.25 per cent in that time.