PM Julia Gillard: Labor Guns for More Savings to Deliver on Crucial Welfare Services

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By Erik Pineda | January 30, 2013 1:34 PM EST

Prime Minister Julia Gillard will face the National Press Club on Wednesday presenting crucial structural revisions that hopefully will lead to federal savings, the bulk of which to fund programs that are in line with Labor's core values.

"We will make the tough necessary decisions to ensure our medium term fiscal strategy is delivered and our centrepiece plans for Australian children and Australians with a disability are funded in this new low revenue environment," the Labor leader's speech was quoted by The Australian today.

The tough decisions will mean rechanneling of federal funds where they are mostly needed, analysts said, pointing out too that the government is gearing up for the adjustments as Australia a 'low-revenue environment'.

With perception that the country's mining boom has peaked, in the process diminishing the resources sector's ability to drive up the annual national income, Ms Gillard is expected to rollout adjustments that adhere to stricter fiscal discipline without abandoning the more important government services.

"Changes to family payments, cuts in concessional tax arrangements for self-funded superannuation contributions, a further tightening of the private health insurance rebate, a decrease in the 50 per cent capital gains tax discount, and a clampdown on loopholes such as the exemption from fringe benefits tax for employees of churches and charities," should be expected, according to The Sydney Morning Herald.

Despite the earlier admission by Treasurer Wayne Swan that the budget surplus pledged this May is no longer a strong possibility, the Gillard Government will stay the course on its ambitious disability insurance and educational reforms as shown in the NPC speech of the prime minister, advance copies of which were provided to media outlets.

"We will make the tough, necessary decisions to ensure our medium-term fiscal strategy is delivered, and our centrepiece plans for Australian children and Australians with disability are funded," Ms Gillard will say.

The new Labor roadmap, however, raises the possibility that much of the brunt of the financial adjustments will be carried by affluent Australians, previously recipient of concessions from both Liberal and Labor governments.

But the prime minister will assure that "our record of cutting wasteful programs, in line with our Labor values and purpose, is already strong."

The major shift is set to play out with Labor facing the prospect of leaving government later this year as a new report showed that the ruling party is likely to shed enough marginal seats in the 2013 federal election, paving the way for the return of a conservative government with a Liberal prime minister in Opposition Leader Tony Abbott.

Already, the opposition is ramping up its campaign of convincing the public that its platform makes for a better government, also re-amplifying its claims that Labor will try to realise savings by imposing more and higher taxes, not only for the rich but for all Australians.

"The bottom line is under Labor, Australians are going to have to pay more because they waste money," Shadow Treasurer Joe Hockey told ABC in an interview.

Also, senior Liberal figure Christopher Pyne reminded Ms Gillard that Aussies are sick of "rhetoric and platitudes." The prime minister should instead lay down "a sustainable economic plan for the country." Mr Pyne told ABC.

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