Winners and losers in the Australian budget

Australian Treasurer Scott Morrison says he has restrained spending more than any government in 50 years

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.”

Who benefits
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.

Who loses
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.


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9 Comments & Questions

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Yay tax cuts. Oh hang on we have a Labour govt in here now. They only introduce more taxes, so I guess there's not going to be any tax cuts for us.
Thanks for that all you Labour, Greens, and NZ First voters.

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Hush! NZ is moving to a kinder and more generous society.

Will be a much poorer one with more New Zealanders leaving again for Australia but that's exactly what the Coalition of the Confused Three wants - more state dependents to increase their vote bank.

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I have 4 growen up children in Australia, been there 4 15 years plus,and have no intention of coming back to nz,they have done exceptionally well there,they took risks,and it worked 4 them,and no, I gave them no help,they wanted to do it by themselves without my help . I'm a very proud Dad.

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Good on you and your children, Gary. You are rightly proud! Well done.

There are already 650,000 New Zealanders living in Australia. It’s only been in recent years that there was a reverse flow. Unfortunately, this government is hell bent on driving more hardworking, self reliant and law abiding New Zealanders to migrate to Australia while cranking up the welfare dependent dope smoking rental property trashing numbers in NZ.

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More will just leave,its far to expensive to live in NZ,I mean everything.

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Is it really? When I was in Australia it seemed to me that prices of everything seemed to be on a par with NZ. Not a lot of difference that I could see actually.

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Government has offered $11,788 for life to any pensioner over 65 years of age who owns a home. The reverse mortgage is set at 5.25% and will be repaid when the home is eventually sold as estate is disposed of.

What could go wrong? perhaps property doesn't go up in value (like in Japan) over the next 25 years.

But you would have to say it is a means for the Government to keep the over 65's on side.

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This budget from Australia just goes to show how out of step our new Government is with our international partners. America, and now Australia is giving tax cuts. Ours is giving substantial tax increases. This can only lead to New Zealand becoming even more poor and unproductive as well as uncompetitive with respect to the rest of the world.

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There is really zero reason why any politician, particularly the leftists, should support having the 0% income tax threshold set below the living wage.

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