Hockey delivers first “tough” budget

Hockey delivers first “tough” budget

Federal Treasurer Joe Hockey has announced the Budget deficit will fall from its current $49.9 billion to $29.8 billion next financial year, due to a raft of spending cuts announced in the budget.

The Federal government is predicting the deficit will then fall to $2.8 billion in 201718, as taxes for the wealthy increase, co-payments are introduced, changes to the pension and welfare are made, foreign aid spending is slashed and the public sector is reduced.

But the Opposition has lashed out at the government saying it has broken two key promises, cutting $80 billion from health and education in the next decade.

Here’s an outline of what has been announced in the 2014-15 budget.

Cuts to Red Tape for business

The Abbott government has delivered on its promise to cut the company tax rate by 1.5 percentage points for around 800 thousand businesses and says its commitment to abolishing the carbon tax and the mining tax will help these businesses.

Mr Hockey has also announced the government will remove 1 billion dollars a year in red tape “because regulation means more staff doing paperwork and fewer staff helping customers.”

Debt levy for high income earners

From 1 July this year and for just three years, higherincome earners will pay a Temporary Budget Repair Levy that increases the top marginal tax rate by two percentage points, for people earning more than $180,000 a year.

Changes to pensionĀ 

From September 2017, increases in pensions will be linked twice a year to inflation.

The pension eligibility age will gradually increase to 70, by 2035.

Asset and associated income test thresholds will be indexed between now and 2017, but then remain at fixed levels for three years.

Untaxed superannuation will be included in the income test for new recipients of the Commonwealth Seniors Health Card and the annual Seniors Supplement will be abolished from 1 July this year.

Welfare changes for families and young peopleĀ 

The Family Tax Benefit Part B income threshold will be reduced to $100,000.

For a typical family receiving the base rate of Family Tax Benefit Part A, payments will start to reduce when family income exceeds $94,316 per year.

Foreign Aid cut

The Government has decided to reduce the growth in our foreign aid budget to save $7.9 billion over five years.

Government agencies to go

The federal government has reviewed more than 900 government bodies, boards, committees and councils and more than 70 are being abolished.

Mr Hockey says “a smaller, less interfering Government won’t need as many public servants.”

He says 16,500 staff will leave over the next three years without compromising frontline services.

The Federal Government will also abolish a range of industry assistance programmes, saving over $845 million.

Tradies to receive education funding, but Uni students to pay more

From July this year, the Government will also support those learning a trade by providing concessional Trade Support Loans of up to $20,000 over a fouryear apprenticeship.

The treasurer says the government gives young people loans to help them complete a university course, “so it is only right that those completing a trade qualification get the same fair go.”

Under changes to higher education, more students will receive financial help, but they will also have to pay more for their degrees.

Universities will be able to set their own tuition fees from 2016, which will inevitably see some course costs to rise.

Meanwhile from July 2016, students will have to pay back their loans sooner, with repayments starting when they earn over $50,638 a year.

$20 billion Medical Research Future fund, to be paid for by co-payments

A $20 billion Medical Research Future Fund will be established in the next 6 years.

This funding will be in addition to existing levels of funding through the National Health and Medical Research Council.

The Medical Research Future Fund will receive all the savings from the introduction of a $7 Medicare cocontribution, “modest” changes to the Pharmaceutical Benefits Scheme and other “responsible changes in this Health Budget, until the Fund reaches $20 billion,” Mr Hockey said.

Infrastructure to be key focus for Coalition as mining boom ends

Mr Hockey has announced a package of measures that invest in infrastructure.

In New South Wales construction on the $11 billion WestConnex project will start within 18 months, creating 10,000 new jobs.

Work on the $18 billion East West Link in Melbourne will start before Christmas and will create 6,000 new jobs.

Construction will soon start on the Toowoomba Second Range Crossing; the Perth Freight Link; the Midlands Highway upgrade in Tasmania and the North South Road Corridor project in Adelaide.

Meanwhile $200 million of new Black Spot funding, and $350 million extra for Roads to Recovery will be delivered to boost infrastructure across regional Australia.

ABC to lose Australia Network, but Community Broadcasting safe

The ABC has lost the contract for Australia Network, saving the Government $196 million over nine years.

There is no more funding outlined for the Network, indicating it the service will be cut.

But in good news for Community Broadcasters, the Community Broadcasting Program will be kept, despite the Commission of Audit recommending it should be abolished.

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Amy Whittaker
Amy Whittaker 1402 posts

Amy joined the NRN team in August 2011, before graduating from a B of Arts (Communication-Journalism)/B of Sports Studies from Charles Sturt University in December 2011.

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