Families to be hit by government's savings: Abbott

22 Oct 2012, 4:02 pm   -   Source: AAP

Opposition Leader Tony Abbott says the mid-year budget update shows the government's economic management is a failure.

Opposition Leader Tony Abbott says families will be hit by federal government savings revealed in the mid-year budget update.

Mr Abbott said Labor's economic management was a failure, as shown by its "incredible shrinking budget surplus".

"This is a government that will never, ever deliver an honest budget surplus," he told reporters in Canberra on Monday.

"Families have been hit."

In the mid-year economic and fiscal outlook (MYEFO) released on Monday, Treasurer Wayne Swan pared back the projected 2012/13 budget surplus to $1.1 billion, from $1.5 billion in May.

He also announced changes to the baby bonus and the private health insurance rebate scheme, as part to a plan to generate $16.4 billion of budget savings over the four-year estimates period.

Shadow treasurer Joe Hockey said there was no economic strategy in the government's MYEFO document and that it raised more questions than it answered.

"It is quite clearly a continuation of the cook-the-books strategy," he told reporters.

The only way the government was going to get to its forecast surplus was by generating a further $30 billion in taxation revenue this year, he said.

The government needed to explain some discrepancies in some of its measures, including why the contingency reserve has suddenly risen, he added.

"The government is budgeting for a boost this year of more than $2 billion but they are not explaining where it is coming from - it is extraordinary," Mr Hockey said.

"And it goes on and on and on; these are questions that need to be answered by the treasurer."

Asked about Labor plans to reduce the baby bonus to $3000 from $5000 for second and subsequent children, Mr Hockey said it was an attack on big families.

"Why are they discriminating against families that are bigger? he said.

"Families are under pressure ... This is attacking families."

Asked if the next coalition government would commit to fixing the time for the release of the MYEFO documents, Mr Hockey said: "Absolutely."

He pointed to former coalition treasurer Peter Costello, who released his MYEFOs in December.

The opposition has questioned the October release of the Labor MYEFO, saying the government has something to hide.

The opposition also attacked government plans to make big companies pay their tax to the government each month, rather than each quarter.

Mr Hockey said this could hurt companies with lumpy cash flows and that Labor should have consulted business on the plan.

"It will affect dividends; it will affect the cost of capital," he said.

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