Refusal to raise taxes spells more budget cuts
BUDGET cuts worth at least $5 billion are expected to be unveiled today, to offset new programs including the Prime Minister's $1.1 billion innovation package.
The cuts will be released in Treasurer Scott Morrison's first major budget announcement since taking the role, the mid-year economic and fiscal outlook.
But beset by still falling commodity prices and a pledge that any new tax reforms will be offset by income tax cuts, Mr Morrison aims to cut spending to try to reach an eventual surplus.
Deloitte Access Economics modelling of new spending announcements since May shows an extra $5 billion in commitments have been made over four years.
Among those commitments were the $1.1 billion innovation package, $700 million to re-settle 12,000 refugees and a host of smaller initiatives.
The firm's modelling comes amid other recent economic forecasts showing the budget deficit could widen to up to $39 billion over the next four years.
Mr Morrison's efforts to reach a deal with states on the GST were suspended last week, with the federal government now to go it alone on tax reform.
On Sunday, he said today's budget update would give the public a "realistic outlook for economic conditions".
He has repeatedly said the government would not be aiming to "restore the budget" by increasing the "tax burden" on voters.
But Labor's shadow assistant treasurer Andrew Leigh said he was concerned the Treasurer had "no coherent economic vision".
The Greens' Adam Bandt released costings showing up to $37 billion could be raised by winding back four tax breaks.
Those changes were: ending the capital gains discount and negative gearing for new investors, cutting superannuation tax breaks for high-income earners and abolishing fossil fuel subsidies.