Welfare and tax concessions 'could be targets' in May Budget TAX revenue will have collapsed by $12 billion by the end of June, according to Treasury forecasts of plummeting company profits. The shrinking revenue confirms the May 14 Budget will include extensive spending cuts. The Government promises the cuts will not be so harsh that they will cost jobs and stunt economic growth, which has raised speculation welfare and tax concessions could be targets for cuts. So far the Government has indicated that only plans for increased school funding and a national disability insurance scheme will be protected. The Treasury forecast means the money collected by the Federal Government will be $12 billion less - across a four-year period - than forecast just seven months ago in the October Budget update. Treasurer Wayne Swan revealed a week ago a $7.5 billion "sledgehammer" had crashed through anticipated tax revenue. Prime Minister Julia Gillard today reveals that a further $4.5 billion will be added to the shortfall by the end of the financial year in just three months. The Prime Minister's speech to an economic conference in Canberra today is set to promise a plan to respond to "the huge reductions in revenue growth over the next four years" caused in part by the high exchange rate of the Australian dollar which is making exports less competitive. Outlining the problem, Ms Gillard is expected to say the profits and consequent tax revenue slump was caused by the fact "the prices for what Australian companies sell overseas are lower, imports are cheaper, local competition is fierce." "Those things add up to business making less profit than planned," her speech says. That puts pressures on our stable and resilient economy and it is one reason businesses and workers still need to work so hard to get ahead. When businesses make less profit than planned, it also means Government gets less money in tax than expected. That's the big challenge for the nation in this Budget - and it defines the decisions the Government's confronting as we put the Budget together. Ms Gillard will say that while the Budget will be tough it will "make necessary investments in the nation's future, to ensure that none of our people are left behind." "We won't, during this time of reduced revenue, fail the future by not making the wise investments that will make us a stronger and smarter nation," says her prepared speech. Better school funding and school improvement will not be jeopardised. 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. And we won't fail to make the wise investments that make us a fairer nation. DisabilityCare must not be jeopardised. A fragmented, unfair, inefficient system hurting 400,000 Australians with disability and their families and carers - and putting at risk anyone who could acquire a disability - cannot be left in place.