The Australian federal budget has far more winners than losers as Malcolm Turnbull’s government uses a buoyant economy to deliver widespread benefits ahead of next year’s election.
Treasurer Scott Morrison has delivered on a widely predicted pledge to return the government accounts to a surplus a year earlier than expected.
The deficit is expected to shrink from $A18.2 billion this year to a surplus – the first since 2008 – of $A2.2b in 2019/20,
Booming company tax collections on the back of elevated iron ore and coal prices, combined with strong jobs growth, have boosted government revenues while other measures have restrained costs.
“As a government, we have put constraints on how much we spend and how much we tax, to grow our economy and responsibly repair the budget,” Mr Morrison said.
“Real expenditure growth remains below 2%, the most restrained of any government in more than 50 years.”
Tax cuts will apply across the board. Low and middle income earners will benefit by up to $A665 a year (topping out at an annual taxable income of $A90,000) from July 1 through an increase in the low and middle income tax offset.
Incomes above $A130,000 will get $A135 a year through a rise in the 32.5% tax threshold from $A87,000 to $A90,000.
The budget delivers for the elderly, too, as was expected. Fees on superannuation accounts with balances of less than $A6000 will be capped at 3%, while pensioners will be able to earn an extra $A50 a fortnight without reducing their pensions.
As expected, a large commitment to infrastructure funding throughout the country is headed by the Melbourne Airport Rail Link and North East Link, as well as Western Sydney Airport Rail.
Also as expected, a $A3.5b Roads of Strategic Importance fund to boost freight routes include upgrades in Tasmania, the Australian Capital Territory, NSW and Northern Australia.
A $A500m Great Barrier Reef plan will improve water quality and combat the crown-of-thorns starfish.
The film industry gets $A140m to attract big budget film productions and farmers will benefit from a big emphasis on technology with $A225m for better GPS and improved weather predictions. A new National Space Agency will get $A40m for initial funding and related projects.
Heading the list of losers is the public broadcaster ABC, whose operational funding will be frozen to save $A83.7m over three years from 2019/20 to 2021/22.
A crackdown on multinational tax avoiders will reduce their ability to use debt to reduce their liabilities. The R&D tax incentive regime will come under much stricter monitoring to eliminate rorts.
A $A4m annual cap on companies with a turnover below $A20m will save $2.4b over four years. However, biotech companies have been excluded.
In attempts to avoid cheats, the Tax Practitioners Board will be provided with additional funding to take action against tax agents that facilitate activity in the black economy.
Welfare fraud detection and debt recovery activities will be stepped up, while the waiting period for newly arrived migrants to access certain welfare benefits will be increased to four years from July 1, saving $A203m over five years.
An Illicit Tobacco Taskforce will be established to crackdown on illegal tobacco.
This article is tagged with the following keywords. Find out more about MyNBR Tags
Most listened to
- Albert-Eden local board chairman Peter Haynes discusses a court battle over Chamberlain Park
- Westpac chief economist Dominick Stephens on how taxes impact housing
- Duncan Cotterill's Christina Lefever has concerns around proposed amendments to the government’s foreign buyers
- Tim Hunter questions whether Pie Funds' performance fee ditching will change the sector
- NBR Radio: The best interviews – updated daily, with Grant Walker