Budget: Winners and Losers
Budget Handed Down: The Abbott government have revealed its tough budget measures, which are expected to halve Australia’s debt over the next ten years, while also announcing $20-billion will be spent on Medical Research.
Prime Minister Tony Abbott has confirmed there’ll be a deficit levy for high-income earners which will kick in at $180-thousand.
PM Abbott has also confirmed petrol prices will rise, as part of tough but crucial measures to get the nation’s finances back on track.
Tony Abbott is defending his government’s unpopular first budget, saying it’s ‘fundamentally honest’ and the right thing for the nation.
The prime minister has started his post-budget media blitz, conceding voters won’t like a lot of the measures, but says they’re necessary.
He’s told the Nine Network he wants to do what’s right for the country, not what’s right for the government.
In his first comments since the budget was handed down last night, Mr Abbott says the government is being up front with Australians about the state of the nation’s finances.
Treasurer Joe Hockey says his first budget will ensure all Australians contribute to the coalition’s budget repair job.
But the government has been sharply criticised for delivering what many stakeholders believe is a budget that favours the boardroom but attacks the vulnerable.
THE WINNERS AND LOSERS IN THE FEDERAL BUDGET
Business heads a short list of winners in the 2014 federal budget, while anyone who gets sick is at the top of a long list of losers:
* Business: company tax cut by 1.5 per cent to 28.5 per cent for 800,000 businesses
* Medical research: $20 billion Medical Research Future Fund created
* Universities: can set own tuition fees from 2016
* Private colleges and TAFEs: government to provide grants to students doing diploma and sub-bachelor courses
* Apprentices: Trade Support Loans up to $20,000 over four year apprenticeship (replaces tools allowance)
* Older workers: $10,000 payment for companies employing over-50s who have been on unemployment benefits for six months
* Infrastructure programs: $11.6 billion infrastructure growth package
* Mothers: paid parental leave scheme from July 2015, albeit reduced to $100,000 income cap
* Sick people: new $7 co-payment to see a doctor; Pharmaceutical Benefits Scheme co-payment increased for medicines over $42.70; states and territories authorised to charge fee for GP-type emergency department visits.
* Families: assistance rates frozen for two years; freeze on thresholds for private health insurance rebate; Family Tax Benefit B threshold capped at $100,000 income and limited to families where youngest child under six years of age
* Pensioners: retirement age to increase to 70 by 2035; pension increases slowed by indexing to inflation instead of wages
* High-income earners: people on $180,000 plus paying additional 2 per cent income tax for three years
* Unemployed people: under 25s to get Youth Allowance, not Newstart; under 30s face six month wait for benefits and must work for the dole
* Retirees: Untaxed super income included in test for new recipients of Seniors Health Card. Annual seniors supplement abolished from July 1 2014
* Motorists: increase in petrol excise and indexation reintroduced to raise $2.2 billion over four years
* Public service: 16,500 job cuts in next three years
* Science: Cuts totaling $147 million over four years at CSIRO, Australian Nuclear Science and Technology Organisation and Australian Institute of Marine Science loses
* Politicians, senior pub servants: one-year pay freeze, gold pass wound back then abolished
* Poor nations: foreign aid growth cut by $7.9 billion over five years
* Clean energy: Australian Renewable Energy Agency abolished, saving $1.3 billion over five years from 2018; $460 million over three years cut from Carbon Capture and Storage Flagships research program
BUDGET WRAP UP
Hear what Budget 2014 means for you:
HOW FAMILY TAX BENEFITS CHANGE
* Family Tax Benefits Part A and B payments to remain the same for two years.
* Eligibility thresholds to be the same for three years.
But from July 1, 2015:
* Part B, worth up to $3818 per family, to be paid until youngest child turns six and cuts out entirely when higher income earner reaches $100,000 PA.
* Single parents parents, receiving Part A, to pocket additional $750 per child aged six to 12, until youngest turns six.
* Part A, worth up to $5840 per child, will have income threshold of $94,316
* Part A and B supplements to be $600 and $300 respectively.
* Schoolkids bonus to be axed
* Income threshold for seniors health card indexed at CPI
* Seniors supplement payments for seniors health card holders stops.
* Three-year freeze on indexation of income and assets tests starts.
* Pension indexation linked to CPI, rather than male average earnings.
* Deeming threshold drops to to $30,000 for singles and $50,000 for couples
* Pension eligibility age lifts to 70.
GOVERNMENT’S LENDING HAND FOR SMALL BUSINESS
* $15m to help small exporters
* To have same protections as consumers for unfair contracts
* New government unit to give contract advice
* Establishment of Small Business and Family Enterprise Ombudsman
HOW YOU’LL PAY MORE FOR HEALTHCARE
* $7 co-payment for GP visits and out-of-hospital pathology and imaging services.
* Capped at 10 visits or $70 for concessional card holders and children.
* $5 increase in cost of PBS medicines.
* Concession card holders will only have to pay an additional 80 cents
* PBS safety net will also be increased to $1597.80 a year
FOREIGN AID FOOTPRINT TAKES A BUDGET HIT
* The aid budget will be locked at $5 billion per year, and will only increase with inflation.
* This will save the federal government $7.6 billion over five years.
* The decision to end the ABC’s contract to run the Australia Network will save almost $200 million over nine years.
* Australia will close its embassy in Baghdad and move its consular services into the UK compound.
CHANGES TO DISABILITY SUPPORT PENSION
* From July 2014 disability support pensioners aged under 35 will have to undertake compulsory work activities.
* $29.3 million over five years towards the program.
* Targeted review of people who accessed payment under lenient rules from 2008-2011.
* Payments cut if recipients travel overseas for more than four weeks.
REBALANCING UNIVERSITY COSTS
* Deregulated course fees means universities can charge what they like.
* New students pay higher proportion of course costs from 2016.
* Commonwealth will upcap places it pays for students doing diplomas and advanced diplomas.
* New scholarships to help disadvantaged students.
* HELP loans remain but government will charge higher interest, up to 6 per cent from CPI now.
* Income threshold for HELP repayment drops to $50,638.
* Fee and loan changes won’t apply to current students until the end of 2020.
KEY FACTS OF DEFENCE BUDGET
* Funding to increase more than $800 million to $29.2 billion, with further increases over next four years.
* Government says it wants to achieve defence funding at two per cent of gross domestic product in a decade.
* 600 Defence public servants to go next year and more in future years.
* 2000 Defence public servants to go in four years.
* Defence superannuation scheme to close to new members from 2016, reducing unfunded liability by $126 billion by 2050.
* Government to conduct scoping study for sale of Defence Housing Australia.
A ‘budget repair levy’, cuts to welfare and foreign aid, co-payments for GP visits and the reintroduction of fuel indexation are among several measures the Abbott government hopes will bring the budget back in the black.
The sick will now have to stump up $7 to visit the doctor, with $5 from that payment used to start a $20 billion medical research future fund.
Filling up the car is set the get more expensive, with Joe Hockey announcing – as expected – the reintroduction of fuel indexation. The increases in fuel taxes will be used to pay for road infrastructure projects around the nation, with the government committing funds to East West link.
Universities tuition fees will be deregulated, with tertiary institutions to set their own fees from 2016.
Family Tax Benefit Part B will be scaled back, which will affect hundreds of thousands of families.
And if you earn more than $180,000, you will have to pay the ‘temporary budget repair levy’ – an extra 2 per cent on your income tax for three years.