Labor's budget mostly welcomed

Labor's first federal budget in 13 years has received mostly positive reaction from industry groups and unions, but the opposition has slammed the 'high-taxing' budget.


Treasurer Wayne Swan's announced a record $21.7 billion surplus, three new future investment funds and almost $47 billion in tax cuts.

Wealthy families are among the biggest losers in this budget, with the introduction of means testing for the baby bonus and the family tax benefit B.

It's also increased taxes on luxury cars and some alcoholic drinks and tightened fringe benefits tax rules.

At least $40 billion will be poured into three new funds for capital investment in infrastructure, health and education.

Opposition: 'High-taxing budget'

The budget was criticised by the opposition as being typically Labor.

“This is a typical Labor high-taxing, high-spending budget, which targets people that it doesn't like,” Opposition Leader Brendan Nelson told reporters.

“There are a number of measures in this budget which hit Australian families, jack up taxes, increase spending and actually increase inflation,” Dr Nelson said.

Opposition treasury spokesman Malcolm Turnbull said the budget was old fashioned Labor.

“It is the first budget in years to introduce new taxes,” he said.

Mr Turnbull also asked what's happening to promises to help battling Australians trying to cope with the rising cost of fuel, private health insurance, interest rates and groceries.

AIG: Budget good for productivity

But Australia's peak industry group responded positively to Labor's first budget saying it should lift productivity and provide a foundation for a much-needed expansion of the country's national capacity.

Australian Industry Group chief Heather Ridout says the Rudd government has taken a hard-nosed approach to spending to address inflation.

Ms Ridout also says the government has backed up its promises in education, personal tax, developing business capabilities and building infrastructure.

She also says Labor's been responsible by more than offsetting new spending with savings and by running a large surplus.

ACTU declares budget a 'relief'

The ACTU says the first Labor budget in 13 years is a welcome relief.

President Sharan Burrow says working Australians, their families and the economy are upfront and centre in a budget that shows the government's on the job.

She's praised the tax cuts worth $47 billion over four years, changes to the Medicare surcharge levy and $20 billion in funding for roads, railways, ports and broadband.

Ms Burrow says she's not worried by the budget prediction that unemployment will rise.

She says with investment in health, education and infrastructure it has the potential for longer-term jobs growth and job security.

ACOSS: Budget a down-payment on social inclusion

The nation's peak welfare group has described the budget as a 'downpayment on social inclusion' and has welcomed moves to curb access to the baby bonus and family tax benefit.

Australian Council of Social Services president Lin Hatfield Dodds says it's good to see low income families and disadvantaged Australians have been spared most of the spending cuts.

She says they'll be looking at working with government down the track.

AMA welcomes budget

The AMA has responded positively to the budget, saying some of what they asked for has been delivered.

AMA president Dr Rosanna Capolingua says it's delivered on indigenous health and focuses on public health issues and public hospitals.

But she says it's missed the opportunity to index Medicare rebates for patients to help protect them against inflation.

Dr Capolingua says it's also missed out when it comes to delivering more health services for rural Australia and the AMA will be keeping the pressure on.

Mothers not happy with baby bonus cap

Practical Parenting magazine editor Mara Lee says she doesn't think capping the baby bonus is a realistic measure for many families.

She says in cases where women who are the main wage earners take maternity leave, which is often unpaid, they not only lose their wage, they now lose the $5,000 bonus.

Ms Lee says the money goes on some of the huge costs in having a baby, obstetric fees and ante-natal care, not on plasma TVs.

She says paying the baby bonus in fortnightly instalments has benefits, making it a pseudo maternity leave pay.

But Ms Lee says many of the costs of having a baby often require payment in a lump sum.

Nats: budget ignores regional Australians

Labor's first budget has upset the Nationals, who described it as a visionless mess that'll do nothing for rising fuel and grocery prices.

Nationals leader Warren Truss says it's also stripped one $1 billion from rural and regional Australia.

Mr Truss says Labor might be putting $176 million into regional development, but he says that's at the expense of the regional partnerships and growing regions programs, worth more than $430 million.

And he says existing agricultural programs worth $334 million have been replaced with $220 million worth of projects, but almost all are related to climate change.

Rural doctors give it the thumbs down

The Rural Doctors Association of Australia says the budget doesn't go far enough to address the health crisis confronting people in rural Australia.

Association president Dr Peter Rischbieth says they've been telling Health Minister Nicola Roxon for months the rural health crisis is getting worse and worse.

Dr Rischbieth says rural Australians rely more and more on internationally trained doctors.

He says there needs to be major incentives to support those choosing health as a career to work in rural Australia.

Car tax hike 'environmentally irresponsible'

Raising the luxury car tax has been called environmentally and economically irresponsible by motor industry representatives.

Federal Chamber of Automotive Industries chief executive Andrew McKellar says it penalises vehicles with the highest level of safety specifications and the highest levels of fuel efficiency and emissions performance.

Mr McKellar says people already pay enough tax when they buy a new car and the tax will add to family price pressures and to inflationary pressures more generally.