Joe Hockey Says His 'Shock Absorber' Budget Will Help Curtail The Biggest Fall In Terms Of Trade In 50 Years

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Federal Treasurer Joe Hockey says he wants the government’s budget to be a “shock absorber” for the forecast decline in the terms of trade this year, the greatest fall since records were first kept in 1959.

“We are facing external headwinds,” Hockey said today during a statement on the federal budget.

“The government has decided to use the budget as a shock absorber for the biggest fall in the terms of trade in 50 years,” he said.

“If we don’t use it, Australians will lose jobs.”

The government already plans to axe 175 government agencies as part of new savings measures, which is in addition to the 76 closed following the May budget.

Hockey said this thinning out would lead to a reported $539.5 million in savings over four years and would not reduce services.

“If you look through what was the reported list of agencies yesterday in the paper, you can see that there’s a vast number of agencies that have a mission that is no longer core business for government,” he said.

Agencies including the World Parks Congress National Steering Committee, Vietnam Veterans’ Education Centre Advisory Panel, Australia in the Asian Century Advisory Board and the Expert Advisory Panel on Northern Australia are all destined for termination.

Hockey said the the Mid-Year Economic and Fiscal Outlook (MYEFO), due tomorrow, will reveal the budget deficit will be worse than previously forecast.

“I never set a target on a date for surplus,” Hockey insisted, attributing the deficit to a drop in iron ore prices and the Labor Party’s decision to block spending cuts and other budget measures.

“Twelve months ago iron ore was $120 a ton. When the market expected $95 a ton, we budgeted for $92 a ton. It’s now $63 a ton. As well, we’ve witnessed a 20 percent fall in wheat prices since the budget,” he said.

“There was also lower income growth, due in part to falling export income compared to what we were expecting.”

However, Hockey said it “wasn’t for nothing” that the government abolished the carbon and mining taxes and associated expenditure.

“As my budget statement will say tomorrow, we expect growth to remain around 2.5% but strengthen to around to 3%,” the Treasurer said.

“We expect housing to grow to levels that are a tick higher than what we forecast in the budget.”

He said job creation has run at three times the speed of last year and “that’s hugely important”.

“We are coping and we are coping well because we strengthened the budget,” Hockey said but warned economic reform was necessary to maintain this position.

Shadow Treasurer Chris Bowen has fired back at Hockey today, saying this is a government which “simply doesn’t care about unemployment”.

He said unemployment numbers have been rising and job growth has fallen dramatically since the introduction of the last federal budget.

Bowen said the Treasurer has to outline a proper and considered budget plan and strategy, labelling today’s announcement as more of “Hockey’s hypocrisy”.

NOW READ: ‘We Made A Mistake,’ Says Joe Hockey As He Prepares To Announce A Bigger Budget Deficit And More Spending Cuts

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