Electricity prices to fall, carbon tax to go, Abbott

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Abbott has again renewed his pledge to repeal the carbon tax. Source: File photo

news.com.au

TONY Abbott is promising falling electricity and gas prices and no cuts to pensions boosted as compensation if carbon pricing is abolished by a Coalition government.

The Opposition Leader said while the billions in revenue from carbon emission penalties would disappear, the welfare benefits the Gillard Government provided households to offset rises in expenses would be retained.

However, billions promised by Labor in other measures aimed at middle and low income earners would be scrapped to pay for the pledge.

And a Coalition government would not oppose in Parliament – and might even adopt in government – many of the spending cuts outlined in the Labor Budget.

The nobody-worse-off promise is expected to be the core of a Coalition election campaign: Lose the tax, keep the benefits. And it will counter Labor’s claims that an Abbott government would “cut to the bone” to get savings.

“The carbon tax will go, but no one’s personal tax will go up and no one’s fortnightly pension or benefit will go down,” Mr Abbott told Parliament in his formal reply to Tuesday’s Budget.

“So with a change of government, your weekly and fortnightly budgets will be under less pressure as electricity prices fall and gas prices fall and the carbon tax no longer cascades through our economy.”

To pay for that, Mr Abbott outlined $5 billion in savings from scrapping programs which were to have been funded by Labor’s mining tax. The tax will produce just $200 million in revenue this financial year.

A Coalition government would drop Labor’s twice-a-year supplement to benefits, and would remove the $500 assistance offered to 3.6 million low-income earners since July last year.\

And the increase of the compulsory superannuation contribution from nine to 12 per cent be delayed by two years, reaching the 12 per cent mark in 2021-22 instead of Labor’s target of 2019-20.

As expected, Mr Abbott also said a Coalition administration would not oppose, and in government might even implement, major elements of the Budget despite calling them “objectionable”.

He continued the Opposition’s attacks on such measures as abolition of the Baby Bonus, “attacks on Medicare” and “robbing Peter to pay Paul on education”.

“But thanks to Labor’s poor management over five years, there is now a budget emergency,” Mr Abbott said.

“Hence the Coalition may decide not to oppose any of them, doesn’t commit to reversing any of them, and reserves the option to implement all of them in government, as short-term emergency measures to deal with the budget crisis Labor has created.

“Far from cutting to the bone, we reserve the right to implement all of Labor’s cuts, if needed, because it will take time to undo all the damage this government has done.”

Mr Abbott did not go into the detail of one of his more contentious policies, a generous paid parental leave scheme which would pay high-earning women close to $3000 a week for six months of caring for a newborn. Mr Abbott wants to increase company tax paid by 3000 big corporations by 1.5 per cent to cover his scheme, and offer a “modest” tax cut for all companies as well.

And he gave no indication whether a Coalition government would follow Labor’s Gonski plan for increased school funding, to which just NSW has signed up. Previously he has said the current funding scheme would continue for two years.

He would keep the disability insurance scheme and its 0.5 per cent increase in the Medicare levy to pay for it.

The Abbott savings would come from cuts in the public service and to red tape, by offering “smaller government”. 

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