Hockey wants economic bang from budget

Treasurer Joe Hockey hopes his May budget will give the economy a boost.

Federal Treasurer Joe Hockey

Treasurer Joe Hockey says a taxation discussion paper could lead to debate around the merits of keeping company tax and the GST (AAP)

Treasurer Joe Hockey says it is essential that every dollar spent in the May budget gives the economy a boost.

That is because the economy is clearly not strong.

Last week's national accounts showed the economy grew by just 2.5 per cent in 2014, well below a level that would put downward pressure on unemployment.

"Every dollar we spend needs to be a dollar that gets more bang in the economy," he told Sky News on Sunday.

The government will soon announce a families package aimed at encouraging work participation, and a small-business package to drive jobs growth.

It has not given up on the measures from last year's budget, either, which have been blocked by the opposition and crossbenchers.

But Mr Hockey stopped short of saying whether the government would go to a double dissolution in pursuit of them.

"That's not for me to call, but it is clearly unacceptable to only have one side of politics offering a plan for Australia's future and the other side of politics just saying no to everything," Mr Hockey told Sky News.

Shadow assistant treasurer Andrew Leigh said Labor was keen to use its time in opposition wisely and as if it were training for its first marathon - "that's pretty slowly".

In contrast, Dr Leigh said coalition's training for office was essentially attacks and three-word slogans.

"So when they got to the race, they didn't have the big-picture ideas for creating a better Australia. We won't make the mistake," Dr Leigh told ABC television.

Business Council of Australia chief Jennifer Westacott said business was not so concerned about the speed of reform.

"There is more concern about getting the reform right ... so that it sticks," Ms Westacott told Sky News.

She said the Abbott government's decision to dump its Medicare co-payment was a case in point because who paid in the health system still needed to be sorted out.

One thing is clear - there will be no income tax cuts until at least 2020/21, even though average earners will approach $80,000 a year over the next couple of years just through wage inflation, taking them into the second-highest tax bracket.

Mr Hockey wants to reduce taxes but cannot when the budget is in significant structural deficit.

"We can't surf back to surplus on increasing taxes," he said.

The treasurer said the government would release its tax discussion paper in April.


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Source: AAP


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