Log in
E-mail
Password
Remember
Forgot password ?
Become a member for free
Sign up
Sign up
Settings
Settings
Dynamic quotes 
OFFON

4-Traders Homepage  >  News

News

Latest NewsCompaniesMarketsEconomy & ForexCommoditiesInterest RatesHot NewsMost Read NewsRecomm.Business LeadersCalendar 

Australia Plans Medicare Levy Hike As Election Looms

share with twitter share with LinkedIn share with facebook
share via e-mail
0
05/01/2013 | 03:45am CET
   By Enda Curran 
 

SYDNEY--A steeper-than-expected fall in annual revenues has left Australia's Labor government planning a hike in a medical insurance levy to fund a new disability healthcare scheme, a move that will raise 3.3 billion Australian dollars (US$3.4 billion) but will set it up for a potentially bruising battle with voters just months ahead of a scheduled election.

The move by Prime Minister Julia Gillard comes just days after she warned of a A$12 billion revenue shortfall and said all options to fill the funding gap would be considered. Having once sold its economic management as one of the government's key strengths, the weakening budget position has piled pressure on Ms. Gillard ahead of an election later this year that the government is tipped to lose.

Ms. Gillard has promised billions of dollars in extra funding for healthcare and education reforms, hoping to reverse voter polls indicating that the center-right Liberal-National coalition, led by Tony Abbott, will win a general election scheduled for Sept. 14.

Until recently Ms. Gillard had staked her government's political reputation on returning a budget surplus in the current fiscal year. It backed off from that pledge in December as it became clear the target was unrealistic.

Australia recorded a A$44 billion budget deficit last fiscal year, and had originally eyed a surplus of A$1.08 billion in the current year which ends June 30. The annual budget is due on May 14, and some analysts have said they expect Treasurer Wayne Swan to forecast a deficit of up to A$25 billion--or about 1.7% of the nation's gross domestic product.

In her latest maneuver, Ms. Gillard said she wants the Medicare levy to be increased to 2.0% from 1.5% if her party returns to office after the election. If approved, the increase would be effective from mid 2014 and would raise up to A$20 billion in the years after.

"There is less tax money available to government than we were expecting," Ms. Gillard told reporters. "It's not an easy choice."

The government's fiscal position has worsened in recent months as a stubbornly high Australian dollar has squeezed the profits of manufacturers and others that rely on overseas markets. The Aussie dollar, as it is known locally, continues to trade near record highs against a handful of major currencies, including the U.S. dollar, even after a yearlong campaign of interest rate cuts by the country's central bank.

The Reserve Bank of Australia has cut its benchmark cash rate six times since late 2011 to 3%, matching the low reached in the depths of the global financial crisis. It has sought to offset weakness in the world economy and stoke other parts of the resource-rich economy as miners scaled back projects.

Write to Enda Curran at enda.curran@wsj.com

share with twitter share with LinkedIn share with facebook
share via e-mail
0
Latest news
Date Title
12:55p ENDEAVOUR SILVER : to Release 2016 Financial Results on March 2, 2017
12:55pDJBHP BILLITON : Copper Falls on Weak Demand
12:55p Magnets and Magnetic Materials - Global Strategic Business Report 2017 - Research and Markets
12:54p MOODY : Sticks to Initial Assessment of Trump, US Economy
12:54p DIRECTOR DEALINGS : Dunelm Chairman Harrison Buys Shares
12:54p LANNETT : Announces Addition To Management Team
12:53p UK shop sales rise but retailers worry about inflation - CBI
12:53p IDEX : Deals worth more than Dh3.42b announced on day four at Idex
12:53pDJToday's Top Supply Chain and Logistics News From WSJ
12:53p Global Laboratory Balances and Scales Strategic Business Report 2015-2022 - Research and Markets
Latest news
Advertisement
Hot News 
7.90%CROWN RESORTS : Casino Operator Crown Puts Big China Play on Hold
6.32%British property firm Intu hikes dividend for first time in five years, 2016 NAV unchanged
2.34%NATIONAL EXPRESS : raises free cash flow outlook on international demand
1.39%LLOYDS BANKING : U.K. Government Reduces Stake in Lloyds to 3.89%
-3.21%CENTRICA : Returns to Profit Amid Restructuring
Most Read News
01:14a APPLE : Tech breakthroughs take a backseat in upcoming Apple iPhone launch
02/22 ABB : Switzerland's ABB hit by $100 million South Korean fraud
02/22 PRUDENTIAL FINANCIAL : may hit Wells Fargo for account scandal costs-filing
05:01a BARCLAYS : reports surprise capital boost as legal costs loom
01:52a AXA : says 2016 net income rises, on track to achieve targets
Most recommended articles
06:53aDJToday's Top Supply Chain and Logistics News From WSJ
06:49a Ghosn cedes Nissan CEO role to focus on alliance with Renault, Mitsubishi
06:45a CRESCENT POINT ENERGY : Canada's Crescent Point Energy posts bigger quarterly loss
06:44a GLENCORE : ready to pay out, snap up assets after profit rebound
06:40aDJGold Ticks Higher as Stocks Pull Back