Swan says federal budget pain will extend to all households

Increases to taxes on cigarettes and alcohol have been put on the federal budget agenda after Treasurer Wayne Swan declared that households would have to share some of the burden of containing the Rudd Government’s widening budget deficit.

“I think everybody is going to have to do their bit in this budget. Everybody,” Swan said yesterday.

“It doesn’t matter whether we take a political hit. What we have to do is the right thing by the country – stimulate the economy now to support jobs and business, put in place vital investments for the future, and make sure we make those savings for the future so the budget is sustainable in the long term. And whether that makes us unpopular or gives us a political hit is the last thing on my mind.”

A report in The Australian has suggested the Government could raise excises on cigarettes and beer to help plug the budget deficit, which looks set to exceed $70 billion.

There are also suggestions the Government may take aim at fringe benefits arrangements, including provisions that allow workers in the not-for-profit sector to claim entertainment expenses as a salary offset.

But Opposition leader Malcolm Turnbull has lashed the Government over its plans to run up debt of around $300 million and has claimed that debt would be much lower if he were prime minister.

He has also welcomed the prospect of an early election.

“We have a Government that is addicted to debt,” he said. “We will put Australia’s finances back to rights. A Turnbull government will return Australia to surplus long before the Rudd Government ever could.

“They have no hope. They have no discipline. This is just old Labor.”

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SmartCompany will be travelling to Canberra on 12 May to dissect the federal budget from the point of view of entrepreneurs and business owners. Don’t miss our special Budget email, published just after Treasurer Wayne Swan starts speaking on budget night.