PM cites measured budget as business frets

Prime Minister Tony Abbott has responded to business groups' concerns he is going soft on reform, saying the approach to the budget will be measured.

Prime Minister Tony Abbott

Prime Minister Tony Abbott. (AAP)

Prime Minister Tony Abbott has changed his view of what the May budget will look like, but only slightly.

After predicting last week that it would be a "dull affair", he now prefers the term "measured" - hardly a description to enthuse concerned business groups.

They are worried the government is going soft on reform after spending nearly 12 torturous months trying to sell its first budget.

Two members of Mr Abbott's commission of audit agree.

Commission chairman Tony Shepherd says the government has to be consistent and persistent on difficult savings to continue the work started in the audit and set out in the intergenerational reports.

Amanda Vanstone, a minister in the Howard government, is concerned Australians are becoming "dangerously complacent" with a she'll-be-right-mate attitude.

"I worry about what will happen to our economy if we have another crisis like the GFC and we would have to borrow large amounts," she said.

Asked to respond to their worries, Mr Abbott said the budget would be "measured, responsible and fair".

Opposition Leader Bill Shorten took the advice to mean the government was being told to "get the axe out, go harder".

But Mr Abbott said that was just scaremongering, accusing Labor of sabotaging the solution to the budget problem it had created in government.

As Treasurer Joe Hockey plans to kick-start his tax review next week, a new row emerged over distribution of GST revenue to the states and territories.

The Commonwealth Grants Commission, which decides what each state gets, has reportedly circulated options that would allow greater distribution flexibility.

Western Australia has long argued for a greater proportion of GST, more so now it has been hit by a steep drop in the iron ore price.

One option reported is the use of a "lagged five-year moving average" for iron ore prices rather than a three-year average.

It would provide WA with $547 million more from the GST carve-up for a state that receives just 35c in every dollar of GST it pays now.

Labor MP Alannah MacTiernan said NSW and Victoria would go "completely feral" if they were in the same position.

Mr Abbott said the commission's options would be dealt with "in the fullness of time", dismissing claims NSW would lose $200 million under the option.

"It's all just scare," he said of Labor warnings to NSW voters two days out from a state election.


Share

3 min read

Published

Updated

Source: AAP


Share this with family and friends


Get SBS News daily and direct to your Inbox

Sign up now for the latest news from Australia and around the world direct to your inbox.

By subscribing, you agree to SBS’s terms of service and privacy policy including receiving email updates from SBS.

Download our apps
SBS News
SBS Audio
SBS On Demand

Listen to our podcasts
An overview of the day's top stories from SBS News
Interviews and feature reports from SBS News
Your daily ten minute finance and business news wrap with SBS Finance Editor Ricardo Gonçalves.
A daily five minute news wrap for English learners and people with disability
Get the latest with our News podcasts on your favourite podcast apps.

Watch on SBS
SBS World News

SBS World News

Take a global view with Australia's most comprehensive world news service
Watch the latest news videos from Australia and across the world