Treasurer Joe Hockey says his first budget on May 13 will aim to lift economic growth, while taking action on a deteriorating fiscal position.
As the jobless rate struck a decade high of six per cent, Treasurer Joe Hockey has assured Australians that his first budget will be focused on growth.
The government has repeatedly warned of the need to take action on a federal budget that risks being in deficit for the next decade with debt ballooning to $667 billion.
But some sections of business have warned against big spending cuts as the economy struggles at a sub-trend growth pace.
“The May budget will be focused on growth. It doesn’t mean you can’t have some fiscal consolidation,” Mr Hockey told reporters in Canberra on Thursday.
The treasurer has been talking with his state and territory counterparts, with the aim of raising potentially $130 billion in asset sales across the nation and recycling that capital into productive infrastructure.
“Ports, railways, airways, roads, things that add to productivity are the things that are going to attract first priority,” Mr Hockey said.
“We haven’t got time to muck around.”
The revenue-raising exercise comes as the International Monetary Fund highlighted the challenge facing the federal government in repairing the budget.
“To achieve the aim of returning to and maintaining a budget surplus, sizeable cuts in projected spending would be required,” the Washington-based institution said in its annual report on Australia.
It said the recommendations of the government’s national commission of audit review of the commonwealth’s operations and spending will be important in reaching this aim.
The commission is due to hand over its interim report to Mr Hockey this week, which could offer recommendations of potential federal asset sales.
Mr Hockey refused to give a “sales list”, but said the biggest assets are at the state level.
But he said this was not being driven by an “ideological bent”, rather it was about creating jobs at a time when the private sector is loaded with cash.
In a note to clients, ANZ Research believes the government will put in place policies in the May budget to give the states incentives to move quickly.
It believes the greatest beneficiaries are likely to be the NSW and Queensland governments, which own the greatest majority of public sector assets.
The federal coalition does aim to sell government-owned Medibank Private for $4 billion.
Finance Minister Mathias Cormann has defended the sale and dismissed claims from doctors that it will push up health premiums.
He said the health insurer operated in a market of 34 health funds.
“Whether Medibank Private is in public or private ownership will not have any impact on premiums whatsoever,” Senator Cormann told ABC Radio.