PM to reveal $12 billion budget hole Prime Minister Julia Gillard is set to announce a $12 billion shortfall in tax revenues for 2012/13. SCHOOL funding reforms and the national disability insurance scheme will not be jeopardised by a $12 billion budget revenue shortfall, Prime Minister Julia Gillard will promise. In a speech to an economic conference in Canberra on Monday afternoon, Ms Gillard will confirm Treasury estimates that weaker tax revenues will slice $12 billion from the budget bottom line for the current financial year. That means the 2012/13 deficit is likely to be at least $11 billion, a deterioration from the $1 billion surplus forecast last year. Ms Gillard will tell the conference that business profits are down because "the prices for what Australian companies sell overseas are lower, imports are cheaper, local competition is fierce." That means the government is collecting less tax. "This unusually low revenue, which wasn't forecast even a few months ago, creates a significant fiscal gap over the budget period," Ms Gillard will say. Put simply, spending is controlled but the amount of tax money coming to the government is growing much slower than expected. The May 14 budget is expected to include extensive spending cuts but Labor promises they will not be so harsh that they will cost jobs or stunt economic growth. And plans for increased school funding and disability reform will not be scrapped. "Our nation cannot afford to leave children behind or to leave our nation's future economy limping behind the pack, unable to attract the high wage, high skill jobs of the future," Ms Gillard will promise. Assistant Treasurer David Bradbury hinted that the government was looking at closing tax loopholes used by multinational companies to minimise tax payments in Australia. "There is a particular issue when it comes to erosion of our revenue base from some of the multinational companies that are amongst the most profitable in the world," Mr Bradbury told ABC TV. This is something that I've spoken about at great length in the past but we're also determined to make sure the policy settings address this. He said the falls in revenue experienced by the government came through "no fault of anyone." "It wouldn't matter who was in government - they'd be facing the same set of challenges," Mr Bradbury said. Shadow treasurer Joe Hockey said he was not surprised by the latest figures. Finance Minister Penny Wong declined to confirm whether the budget deficit would be in the ballpark of $10 billion or $11 billion.