2013 Australian federal budget

The budget was not expected to decrease government spending dramatically in an effort to quickly return to surplus. Swan has claimed that such a move would result in rising unemployment and slowing economic growth.[6] A collapse in the price of carbon under the European Union Emission Trading Scheme means a return to surplus is unlikely in the following two federal budgets.[6]

The forecasted current account deficit is lower than the average for the past couple of decades allowing Standard and Poor's assessment of Australia's bond credit rating to remain at the AAA rating.[7]

Tax revenue declines made it clear in late 2012 that the Gillard Government's promised 2013 budget surplus would not eventuate.[2] In the lead up to the budget announcement an estimate of a $17.5 billion decline in forecast revenue was calculated after Finance Minister Penny Wong released government figures. Most of this shortfall was attributed to company tax and the mining tax.[8]

A deficit of up to $10 billion in the 2013–14 financial was predicted by some economists.[9] In early May 2013, the Parliamentary Budget Office forecast that the Minerals Resource Rent Tax (MRRT) would only raise $800 million this year instead of $3 billion which was originally expected.[10]

In March 2013, Prime Minister Julia Gillard indicated an increase on the tax on superannuation contributions was likely.[11] On 1 May 2013, Gillard announced a 0.5% increase of the Medicare levy to fund DisabilityCare Australia which will take effect on 1 July 2014,[12] and which is expected to raise $11 billion over four years.[13] Korjon, a praised economist, states that Swan's implementations within this years fiscal policy is to be successful and a "kick starter" towards its upcoming budget surplus. Conversely, Andrew argues that the improvements in taxation revenues will not take significant effect for a surplus.

The budget included measures to counter tax avoidance by closing a loophole in which companies claim large tax deductions after increasing their Australian operations with debt.[14]

A$2,000 cap on tax deductions for work-related education expense was introduced in the budget.[15]

A few days before the budget was delivered, Treasurer Swan announced the public service was to receive a $580 million reduction in funding over four years.[16] Expenditure on asylum seekers was forecast to be $2.9 billion, an increase of $930 million over previous year, as arrivals were expected to reach a record high.[17]

Included in the introduction of the Minerals Resource Rent Tax was an increase in the Family Tax Benefit Part A scheme. Finance Minister Penny Wong announced the cancellation of the increase prior to the release of the 2013 budget.[18] It was intended to be a measure that would spread the wealth of the mining boom, however as revenue from that tax was significantly lower than expected, the payment had to be scrapped. The increase in the benefit was expected to go to around 1.5 million families.[18]

The baby bonus was abolished and replaced with a family tax benefit equivalent to less than half of the then-current payment.[19] The payment was to cease on 1 March 2014, reducing expenditure by $1.1 billion over five years,[20] and being replaced with an increase in family tax benefits which will be means-tested and limited to $2,000 for the first born and $1,000 for subsequent children.[20]

The budget didn't contain a raise in the Newstart Allowance despite widespread calls for its increase. Instead the amount of money the unemployed may earn before it affects welfare payments was increased.[21] The change was estimated to cost $258 million over four years.[21]

$99.4 million was provided for a new Farm Household Allowance for eligible farmers facing hardship,[22] replacing the previous Exceptional Circumstances Relief Payment and Transitional Farm Family Payment.[23] The payment will begin on 1 July 2014 and be equivalent to the Newstart Allowance. A farm finance scheme is to be introduced which will support farmers in debt.[24]

$400 million was provided for the construction of an eight km tunnel linking the Sydney–Newcastle Freeway and M2 Hills Motorway in Sydney.[25] $3 billion worth of funding out of a total cost of $8 billion for the Melbourne Metro Rail Project rapid transit rail project was allocated in the budget on the condition that Victoria fund an equal amount.[26] $715 million was committed to the Cross River Rail project in Brisbane.[27] Queensland's Transport Minister Scott Emerson was expecting twice as much for a 50–50 cost shared between federal and state governments.

The Australian Indigenous Education Foundation was provided with an additional $22  million.[14] Bonuses paid to those who pay their HECS debts up-front or voluntarily will cease, saving $237 million.[15]

The budget provided funding for new 12 radar-jamming Growler Super Hornet fighter aircraft.[28] Overall spending on defence is up $10 billion compared to the previous year.

The net medical expenses tax offset is to be phased out over two years.[30] A total of $14.3 billion worth of new funding was allocated to DisabilityCare Australia.[29]

The cost of 457 temporary skilled migrant visas was doubled to $900.[31]