The Australian government has announced cuts to middle-class welfare and a crackdown on corporate tax breaks in a bid to secure long-term funding for schools and disability care.
Treasurer Wayne Swan handed down his sixth budget in Canberra on Tuesday, projecting a deficit of $A19.4 billion for this financial year, followed by a shortfall of $A18 billion in 2013/14, AAP reports.
Mr Swan blamed challenging global conditions, lower business profits and the high Australian dollar for a $A60 billion hit to tax receipts over four years while trumpeting $A43 billion worth of savings.
The Labor government will delay the return to surplus to support jobs and growth and pay for the multi-billion dollar national disability care scheme and schools funding programmes ahead of the federal election in four months.
Labor's big spending includes $A14.3 billion for DisabilityCare Australia, which by 2018/19 will support 460,000 people with severe and permanent disabilities.
It will draw some of its funds from a rise to 2% in the Medicare levy.
There will also be $A9.8 billion for new school funding, $A24 billion extra for road and rail projects over 10 years, while health funding will rise to a record $A64.6 billion despite some tinkering with Medicare to save $A1.7 billion.
Labor wants to push the budget to a slim surplus of $A800 million in 2015/16 and deliver a $A6.6 billion in surplus the following year.
Among the savings is a plan to axe the $5000 baby bonus - widely criticised as middle-class welfare - and instead increase family payments for eligible families when they have a new baby.
A crackdown on company tax loopholes will reap $A4.2 billion.
Opposition dismisses forecasts
The coalition says the promise of big spending and balancing the budget within two years is unbelievable and 60% of the savings are new or increased taxes.
Shadow treasurer Joe Hockey said while the budget was described as being about "jobs and growth" it actually projected a worse jobless figure (5.75%) and lower growth (2.75%).
Mr Hockey did not commit to keeping any of the cuts and dismissed Mr Swans' surplus forecasts, arguing the deficit challenge was "substantially larger".