Election speculation grows

Written By miftah nugraha on Sabtu, 03 Agustus 2013 | 19.55

SPECULATION is growing that Prime Minister Kevin Rudd is planning to visit the Governor-General tomorrow or on Monday seeking approval for a September 7 election.

Sources have told media Mr Rudd has settled on the date and is ready to start one of the most anticipated political contests in memory.

The possibility of an official start to campaigning follows Friday's delivery of an update to May's budget predicting weaker economic growth, growing unemployment and more government debt.

Another budget shambles - we're $30bn in the red

L-plate Treasurer's bad news in red

More than 800,000 Australians will be out of a job by the middle of next year, the highest level since 2002. The budget will fall further into the red, with the revelation it had already blown out by $12 billion in just 80 days.

Invoking desperate measures to cushion the economic shock, Treasurer Chris Bowen announced a further round of tax hikes and Budget cuts worth $17 billion to limit the damage.

He blamed the economic slowdown on China for a further $33 billion in revenue losses, bringing writedowns to almost $100 billion over the next four years. Almost $18 billion of that, however, was caused by lower income tax receipts as workers' wages continue to stagnate.

The May budget forecast a $18 billion deficit for this year will now reach $30.1 billion, Mr Bowen revealed. And the national debt will soon surpass $300 billion. But he suggested any attempts to stem the revenue losses in the face of slower economic growth with more savage spending cuts risked killing the economy and adding to further job losses.

Unemployment is set to rise from 5.45 per cent to 6.25 per cent this year, with economic growth also expected to contract from 2.75 per cent this year to 2.25 per cent.

Citing optimistic Treasury forecasts, Mr Bowen claimed things would improve by 2015-16, with a return to surplus of $4 billion for 2016-17 and a miraculous drop in unemployment to 5 per cent.

Claiming the economy was not in crisis but in "transition", Mr Bowen released the Government's economic election plan yesterday by allowing the budget to book $54 billion in deficits over the next two years.

Mr Bowen admitted his statement was the economic plan Labor would take to the election. He challenged the Coalition to adopt the measures.

"This is our economic plan. It has our bottom line in it, it has our costing and our funding proposals," he said.

"The Government is doing this in a transparent way. The alternative government should be doing the same. Australia is undergoing an economic transition, not a crisis, a transition which needs careful economic management. The world is growing more slowly and is having an impact on Australia."

Coalition treasury spokesman Joe Hockey accused the government of losing control: "The budget is in free-fall. The budget has fallen $3 billion a week over the last 10 weeks.

"It's blatantly obvious - Labor has lost control of the Budget and is losing control of the economy."

However, economists and business groups are questioning whether the outlook is still too optimistic in forecasting a surplus within four years.

-- with AAP

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