TECHNICAL UPDATE- BUDGET 2017- YOUR 5 MINUTE QUICK GUIDE

On Tuesday the 9th of May, The Federal Government handed down its Budget for the 2017-2018-  this year’s Budget is founded on the principles of “fairness”, “security” and “opportunity”- Of course, we will not know until the relevant legislation is introduced  into parliament then passed into law which could be a big challenge- See this quick guide to it

ECONOMY

  • Deficit of $29.4 billion in 2017/18 but projected surplus of $7.4 billion in 2020-21
  • Increased Medicare levy adding $8.2 billion to the bottom line for three years
  • Wage growth expected to increase from 2 per cent to more than 3 per cent over the next four years
  • Up to $13 billion of “zombie” 2014-era cuts to education and welfare will be dumped to shore up AAA credit rating

BIG BUSINESS

  • Extra funding for the Tax Office’s taskforce charged with clawing back $15b from the black economy
  • “Google tax” expected to raise more than $4b from big business and multinationals
  • Banks subject to bigger fines of $50m-$200m for serious misconduct
  • Six-basis-point levy on the five largest banks, raising $6.2b over the budget and forward estimates

SMALL BUSINESS 

  • Small business $20,000 instant asset write-off extended for second year
  • Businesses with a turnover of up to $50m will receive a company tax cut
  • Annual temporary work visa levy of $1200 or $1800 per worker a year, and one-off permanent skilled visa levy of $3000 or $5000

HOUSING

  • First-home buyers can salary sacrifice for deposit from pre-tax pay
  • Retirees who sell family home can add non-concessional $300k into super
  • “Ghost tax” of up to $5000 for foreign buyers who leave homes empty for 6 months or more.
  • Community housing associations can borrow money at lower rates of interest
  • Increase capital gains discount by 60 per cent for investments in affordable housing( as from 1 January 2018)
  • $1b to fund deals within cities to develop urban areas
  • Changes to depreciation deduction allowed for plant & equipment for residential real estate. Original purchaser will be entitled but not any subsequent owners.

 

COMMUNICATIONS

  • Gambling ads banned during live sports broadcasts before 8.30pm, and for five minutes before and after start of play
  • $130 million annual licence fee for broadcasters will be scrapped in favour of a $40 million spectrum fee
  • Repealing the 75 per cent reach and cross-media ownership laws

DEFENCE

  • Australian Federal Police get $321m to recruit anti-terrorism/trafficking specialists
  • $350m for mental health services for veterans
  • Defence spending is expected to rise from $32.4b in 2016-17 to $58.7b in 2025-26
  • Extra funding will help security agencies protect Australians at home and abroad

INFRASTRUCTURE

  • Melbourne-Brisbane inland rail link gets $8.4b with construction to begin this financial year
  • Second airport for Sydney at Badgerys Creek to get $5.3b over 10 years
  • $844m to upgrade Bruce Highway
  • $1b for Victorian projects including $500m regional rail fund, $30m for airport link business case
  • $1.6 billion for infrastructure in WA, including funding for better road access to the Fiona Stanley Hospital precinct

Big-ticket items to boost economic growth, jobs and the national psyche

HEALTH

  • Medicare rebate to be lifted, costing $2.2b over four years
  • Medicare levy to be raised by 0.5 percentage points in two years’ time
  • Extra $2.8b for hospitals
  • $1.4b over four years for medical research
  • Price cuts for taxpayer-subsidised medicines, which will save $1.8b over five years
  • $115m for mental health

Better funding of Medicare and the NDIS provides security and insurance for all of us. A fair outcome

FAMILIES

  • One-off energy payments for pensioners ($75 for singles, $125 couples)
  • Almost $430m to support universal access to pre-school for all four-year-olds
  • $5.5m vaccination campaign. Family Tax Benefit A payments reduced by $28 a fortnight if children aren’t fully immunised
  • Expanding ParentsNext program to help young parents get jobs
  • $3.4m over two years to expand Specialist Domestic Violence Units

Little extra funding for families hurt by Medicare levy increase

WELFARE

  • Demerit point system means payments deducted if job interviews skipped
  • $375m to extend homelessness service funding to the states
  • Drug-testing trial will have 5000 welfare recipients put on voucher system if they test positive

Some of the more controversial measures announced but little actual change

ENERGY

Government in talks to buy back share of Snowy Hydro from Victorian and NSW governments

$90m to secure access to Australian gas for domestic use

$37m for new energy infrastructure and gas pipeline in South Australia

The Snowy Hydro initiative had already been announced and there is little more here to get excited about

EDUCATION

  • Extra $2.2b over four years for schools
  • Reintroduction of Gonski-style needs-based funding formula
  • HECS debt threshold lowered to $42,000 from $55,000
  • University students face 7.5 per cent tuition hike
  • Universities hit with 2.5 per cent – or $2.9bn – efficiency dividend over two years

A welcome injection of cash for schools, but university students are worse off with higher fees and faster payments

(Source – www.smh.com.au))