Today, I watched the Federal Treasurer, Scott Morrison's budget speech to parliament. As expected from a geek such as I, I made notes. Then, when my mum popped by I delivered an impressive missive on the main points in the budget.
I am still in shock at what seems from first glance to be an intelligent, well thought out, overwhelmingly fair budget. Yes, there are things people will not like but this is the smartest budget I can think of in a couple of decades, if not longer. I was going to spend time reading budget documents before I commented but there were more important people to attend to, so it can wait.
Here are my notes, based on the Treasurer's address. Please check with the Federal Government for detail (email me regarding facts and I will do my best to correct any mistakes):
- The 2017 budget will restrict payment growth to 2%
- Figures are based on assumed growth of 3% in the next two years
- The Federal Government will build the West Sydney Airport with projected creation of 20,000 jobs in the construction phase and 60,000 long term
- The Government will spend more on the Snowy Hydro Scheme with the aim of buying the Snowy Hydro if all their contractual terms are met.
- Infrastructure spending will include: improvements on the Bruce Highway; roads in WA; Rail in Victoria; 10 Billion dollars on a national rail program which will require detailed business cases for funding.
- 472 Million will be placed in a Regional Growth Fund
- A Melbourne to Brisbane rail connection will be built with construction expected to start 2017/2018
Foreign worker levy:
- A foreign worker levy will apply of $1200-1800 per casual/part time foreign worker.
- A further $3000 per foreign worker levy will apply for full-time employees.
- Money raised by the foreign worker levy will be used to create an Australian Skill Fund to create apprenticeships for Australian workers
- Defence spending will grow by 2 per cent of GDP to 2021
- The Australian Federal Police will receive an additional 300 Million
- Operation Sovereign Borders will continue to be funded
- Funding for Veteran well being was mentioned but not detailed
- The government will lift the freeze on Medicare funding
- 2.2 Billion will be spent on pathology and screening services
- The Government will aim to legislate Medicare as a guaranteed service
- New medicines will be added to the PBS at a cost of 1.2 Billion
- There will be additional hospital funding of 2.8 Billion
- General mental health services will receive 150 Million
- 1.4 Billion over four years will be spent on health research
- The NDIS will be projected to be fully funded by an increase to the Medicare levy of 0.5%
- 80 Million will be spent on services for those with severe mental illness
- Funding for vulnerable children, victims of institutionalized child sexual abuse, victims of domestic violence and Closing The Gap programs were mentioned but not detailed in the speech.
- 18.6 Billion will be spent on education in the next ten years.
- This education funding will be an increase of 4.1% each year.
- University and TAFE students will have to pay off their FEE-HELP, debt earlier (debt incurred for higher learning fees - University and TAFE)
- Payments will start at 42 000 dollars p.a. and people will pay off more of the debt per pay grade
- University fees will increase by 7.5 per cent by 2021
- University will remain a demand driven enterprise
- The ACCC (Australian Competition and Consumer Commission) will receive additional funding to secure energy for Australians
- The Government have an Energy Security Plan to ensure consumers have access to competitive power and power resources are focused on national interests rather than export focus.
- There is funding for new generation transmission technology (so power can get to where it is needed efficiently)
- 3 Billion is costed towards new emission technology for better power supply
- Pensioners who lost their concession card under the previous budget can look forward to having it reinstated
- An Australian Complaints Authority will be set up and Federally funded to investigate any complaints against major banks
- Senior bank staff will be required to register with the government and if found in breach of good lending practices will lose the opportunity to work in the banking sector
- Mandatory reporting by banks to the authority will be introduced
- The ACCC will have funding specifically for investigating competitive behaviour by banks
- A 6 basis point levy will be introduced on banks. This levy will not apply to deposits of less than 200, 000 AUD
- The levy is projected to raise 6.2 Billion
Housing Affordability and Homeless services:
- The Treasurer aims to address housing affordability by building more dwellings
- They will scrap the NRAS (National Rental Affordability Scheme) and in it's place establish a new agreement
- The new agreement will include a housing supply target
- 1 Billion will be towards micro city developments
- 6000 Houses will be built with the release of surplus defence land in Melbourne
- A Commonwealth Land Bank will be set up with the aim of releasing more land for development quickly
- A National Housing Finance scheme will be set up with the aim of granting low cost finance to not for profit organizations who provide affordable housing under trust models
- The CGT discount will rise to 60 per cent for affordable housing trusts
- 375 Million will be put towards homeless services
- A tax cut will be given to first home savers via a savings scheme connected to their super account.
- Contributions saved towards a first home, on top of standard super contributions, will be taxed at a lower rate and available for first home purchase. ( limit of30 000 AUD)
- People 65 years old plus will be encouraged to downsize.
- The government will allow people 65 years and over to place $ 300 000 from their house sale into super under non-concessional contributions.
- The Federal government support negative gearing
- A Foreign Investment Levy will apply if foreign owned dwellings are not occupied, or leased, for at least six months of the year. The levy will be $5000 per year.
- The Multinational tax compliance work by the ATO has raised 2.6 Billion dollars this year
- Projections are that with tough compliance work they will raise 4 Billion from multinational tax dollars next year
- The ATO will do their best to make sure crime does not pay and will receive further funding to prosecute proceeds of crime and illegal tax avoidance cases.
- Negative gearing deductions will be limited. Travel will no longer be claimable and plant and equipment claims will be limited.
- The Treasurer's message was that work is the best kind of welfare
- They will continue to fund programs that focus on getting vulnerable young parents, primarily young women, into work by providing childcare, skills and financial literacy programs.
- Financial penalties will apply for those not meeting Mutual Obligation criteria.
- Drug and alcohol use will no longer be an excuse to miss Mutual Obligation and claim the Disability Support Pension (where it is stated as the sole disability)
- Drug and alcohol testing program will be trialled for 5000 people at risk. Those found to be under the influence of illicit substances will be placed on a cashless welfare card.
- There will be stricter obligations for single parents (this was not detailed)
- New migrants will have to wait longer to receive pension eligibility (no detail)
- Lower tax and red tape for small business.