Australia’s Budget – Cuts In Defence Spending And Foreign Aid

09 May 2012 17:00 - Florence Fullalove

Australia’s Budget – Cuts In Defence Spending And Foreign Aid 

Australia’s government have presented its budget saying it will cut back in defence spending and scale back increases in foreign aid that it had promised. Treasurer and Deputy Prime Minister Wayne Swan outlined spending cuts to achieve a 1.5 billion dollar Australian budget surplus in the fiscal year starting on July 1st. Military and foreign aid-programmes will be hardest hit by the 33.6 billion Australian dollars in savings and cuts. The defence cutbacks include the early retirement of C-139 transport aircraft and a reduction in civilian personnel. Plans to update Australia’s outdated military equipment have also been put on hold. Swan blamed subdued tax revenue due in part to the European debt crisis and damage from record Australian flooding and storms.

A planned corporate-tax cut has been cancelled and there will be changes to a range of tax allowances, including ending tax concessions on severance pay for executives. On delivering the budget Swan said, “Retuning to surplus also locks in confidence, and is Australia’s best defence at a time when the global economy is changing dramatically.” He added, “It creates a buffer in uncertain times and is a very clear sign of our strong economy.” Swan’s budget does not include measures to help low income families as well as tax breaks for small businesses.