Mark Kenny, Peter Hartcher
August 3, 2013
Kevin Rudd plans to visit the Governor-General on Sunday or Monday to seek approval for an election on September 7.
Sources have told Fairfax Media that Mr Rudd has now settled on the date and will fire the starter's gun on what promises to be one of the most intense political contests in memory.
The election campaign comes within days of an extraordinary mini-budget designed to position the government to address changing economic circumstances.
Settled: Kevin Rudd decides the election will take place on September 7. Photo: Andrew Meares
Softening conditions could force an extra 70,000 Australians out of work, as growth slows and Commonwealth revenues collapse by a staggering $33.3 billion over the next four years.
The worsening picture has shredded Labor's budget forecasts which were set just 10 weeks ago, creating a big political headache for the government.
Mr Rudd enjoys a solid personal lead over Opposition Leader Tony Abbott as preferred prime minister, but the respective parties are more evenly poised on 50 per cent each in a series of recent opinion polls.
Australia's jobless rate is officially expected to climb to 6.25 per cent in 2013-14 and 2014-15. The last time the jobless rate was above 6.25 per cent was in September 2002 (6.3 per cent that month in trend terms).
Falling terms of trade and declining tax revenues have sent this year's projected deficit $12 billion higher to $30.1 billion, despite the combined $17.4 billion in spending cuts. A promised balanced budget in 2015-16 has gone by the wayside, despite Treasurer Chris Bowen and Finance Minister Penny Wong sticking with a promised surplus in 2016-17.
But to get there, they plan to send the national balance sheet deeper into the red, first with projected deficits of $24 billion in 2014-15, coming back to $5 billion in the red in 2015-16.
In the job for little over a month, Mr Bowen laid much of the blame at the feet of a slowing Chinese economy. But the opposition attacked the revised economic statement, with its treasury spokesman, Joe Hockey, describing Labor's economic management as ''chaotic'' and its budget ''in free fall''.
Mr Hockey said nearly 800,000 Australians were now likely to be jobless in coming months.
As reported by Fairfax Media, a big rise in tobacco excise is the main revenue measure, reaping almost $6 billion over the next four years. But other savings were outlined, including a near doubling of the public sector efficiency dividend from 1.25 per cent to 2.25 per cent - requiring public servants again to do more with less.
Other boosts to the bottom line include a lower take-up of disability support pensions, and of drugs listed on the Pharmaceutical Benefits Scheme, with that alone securing about $2 billion over the forward estimates period. Another $582 million has been garnered from gaining access to small inactive superannuation funds.
Revealed for the first time are the expected costs of Mr Rudd's recently announced Papua New Guinea ''solution'', which the budget papers show will take up $1.1 billion over four years with operating costs of $175 million in 2013-14.
That is to be ''partially funded from a $423 million reduction in the operating costs of the onshore detention network (a net impact of $632 million) over the four years to 2016-17''. Another $194 million has been earmarked to expand the rudimentary Manus Island facilities
