Treasurer Wayne Swan has revealed cuts to baby bonus payments and the private health insurance rebate to protect his promised budget surplus.

The Federal Government also lowered its forecast for growth, in its mid year review.

Jessica Case reports.

TRANSCRIPT

Wayne Swan announced 16.4 billion dollars in new savings over four years to return the budget to surplus.

Lower commodity prices and falling tax receipts have trimmed the projected budget surplus to just $1.1 billion dollars, down from the $1.5 billion predicted in May.

Wayne Swan, Treasurer: “This is the responsible middle course and what it ass meant is that we have put in place responsible savings of sixteen point four billion dollars.”

He says while Australia’s economic fundamentals remain strong, worsening global conditions have cut almost $22 billion dollars from tax receipts over the forward estimates.

Paul Fletcher, Liberal MP: “What he’s desperately trying to do is hold off a day of reckoning when he has to admit when they haven’t been able to achieve the surplus they promised.”

The savings will come from cuts to the private health rebate, baby bonus and company tax.

The Finance Minister believes the cuts are the best thing for the economy.

Penny Wong, Finance Minister: “We will always look to the impact on the economy and that’s what we’ve done in this mid-year review.”

But Opposition Leader Tony Abbott says this Government is addicted to regulation, spending and taxes.

Tony Abbott, Opposition Leader: “This is a Government that will never, ever deliver an honest budget surplus.”

Mr Swan has vowed to protect the poorest Australians from the cuts.

Jessica Case, QUT NEWS