THE TREASURER, Chris Bowen, and the Finance Minister, Senator Penny Wong, have announced the following:
- The terms of trade have been revised down: the expected deficit in 2013-14 is now $30.1 billion, and the expected deficit in 2014‑15 is now $24 billion.
- The government plans to return the budget to a surplus of $4 billion in 2016-17 by increasing the tax on tobacco by 12.5% per year over the next four years.
- A 0.05% levy will be placed on all bank deposits below $250,000 that are guaranteed by the government from 2016.
- The Government says it will also make "the public service more efficient", and reduce growth in overseas aid.
- Unemployment is expected to rise to 6¼% in 2012-14
- Real GDP growth is expected to be 2½% in 2013‑14, but in 2014‑15 economic growth is expected to strengthen to 3%.
- Nominal GDP is forecast to increase by 3¾% in 2013‑14 and 4½% in 2014‑15, well below its 20‑year average of 6½%.
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The Shadow Treasurer Joe Hockey claims the the budget is in freefall under Labor.
Mr Hockey and the Opposition's Finance spokesman Andrew Robb held a media conference after the government's announcement, claiming the budget has fallen $3 billion a week over the last 10 weeks.
Mr Hockey also said he is concerned that nearly 800,000 people will be unemployed.