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Costello Announces Budget Surplus Of $2.8 Billion

Money For Regions, Defence; Attacks on Illegal Immigration, Dole; Timor Levy Abolished; Dollar Falls In Reaction To Phoney Surplus

Budget 2000Treasurer Peter Costello, delivering the 2000-2001 Federal Budget, has announced a surplus of $2.8 billion.

The auctioning of the mobile phone spectrum has prevented the budget from falling into deficit.

In effect, the budget has fallen back into deficit after several years of cash surpluses.

Media commentary was immediately critical of the budget, one even describing next year’s election as the “mobile phone election”. As Costello was speaking tonight in the House of Representatives, the value of the Australian dollar fell by half a cent on currency markets.

Costello also confirmed that the Timor levy would not be implemented.

He announced a pension increase of 4% on July 1, with indexation to follow, guaranteeing that pensions will remain 2% above what they would otherwise have been.

Costello confirmed a reduction in Company Tax to 30% from 2001-02. He announced a $500 million assistance programme to small and medium business, community groups and education bodies to assist in the implementation of the GST.

The government is introducing a Regional Health Package – More Doctors, Better Services package worth $562 million over 4 years.

Measures totalling $1.8 billion over the next 4 years have been announced for regional Australia.

A Fuels Sales Grants Scheme costing $501 million over 4 years will reduce petrol and diesel prices.

The Agriculture – Advancing Australia package will provide $309 million over 4 years to Australian farmers.

Family allowances are also being increased, costing $2.4 billion per year, benefiting 2 million families.

The government is also increasing funding for isolated children’s education costs.

An additional $650 million is being allocated to public hospital services in the States and Territories.

The government is allocating $100 million to defence support and $128 million for the Collins Class submarines.

Measures to combat illegal immigration have also been announced, as have tougher work tests for dole recipients.

Spending on East Timor will cost $945 million in 2000-01.

Costello claimed that the budget brought together the government’s economic and social objectives. He lauded a debt to GDP ratio of 7%.

Costello forecast growth of 3.75% with unemployment tipped to drop to 6.25% by June 2001. Inflation is forecast to be 2.5%, although it is expected to go over 6% following introduction of the GST.

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