“Fairness. Security. Opportunity.”
Determined to gain traction with Australians, the Turnbull Government is initiating a range of social measures in order to prove that it is listening, engaging and taking action.
In his budget, Treasurer Scott Morrison is focusing on nation building, creating a fairer playing field and opening up growth opportunities – further distancing the Government from the disastrously received budget of 2014, and reversing measures at a cost of approximately $13 billion.
With about half Australian households now receiving a government payment, ScoMo couldn’t afford to ignore “middle-Australia”. It’s no secret that our economy is fragile, with household and national debt at record levels, wages effectively frozen and interest rates at record lows.
In the spirit of allowing Australians to “realise their dreams” and “get ahead”, there are reforms to housing allowing young Australians to enter the housing market and older Australians to downsize without affecting their pension; a significant investment in education nationwide; and a massive boost to infrastructure projects around the country, hopefully generating growth and employment opportunities.
At a glance, here’s a quick round-up of the significant measures announced this evening.
• $75b in infrastructure funding and financing in the next 10 years, an additional $10b national rail program and a $472m regional growth fund
• Establishment of the Western Sydney Airport Corporation, injecting $5.3b of equity creating 20,000 new jobs
• Confirming the further development of the Snowy Mountains Hydro Scheme
• In 2021, defence spending will increase to two per cent of GDP, three years ahead of schedule
• $300m to the Australian Federal Police to lead the charge against terrorism and organised crime
• Replacing the National Affordable Housing Agreement with a new set of agreements requiring states to deliver on supply targets
• First Home Super Saver Scheme – A salary sacrifice scheme allowing first home buyers to move allocated pre-tax income into super savings
• CGT discount to increase to 60 per cent for investments in affordable housing
• Incentives for older Australians (over 65s) to downsize their homes (without affecting their pension) to increase supply
• Tightening measures against foreign investors
• Increasing the Medicare Levy to 2.5 per cent in two years’ time
• Cracking down on multinationals’ tax evasion
• Providing the ATO additional funding to uphold taxation integrity – ensuring everyone is paying their fair share of tax
Bank review and scrutiny
• New levy on the big five banks starting 1 July, raising $1.5b per annum
• Establishing the new Australian Financial Complaints Authority to resolve disputes
• Legislating a new regime for greater accountability of executives
• New mandatory reporting of financial services law breaches and the reforms to raise professional standards of financial advisers and to address conflicted remuneration in life insurance
• $18.6b in extra funding in all schools nationwide over the next 10 years in accordance with the Gonski needs-based funding model
Health repairs and investment
• Development of the Medicare Guarantee Fund to cover essential healthcare
• Providing $1 billion over four years from 2017-18 for the phased unfreezing of the Medicare rebate schedule
• Extra $2.8 billion in funding for hospitals and $1.2 in new and amended listings on the PBS
• The Medical Research Future Fund will get $65.9 million towards preventive health research, clinical trials and breakthrough research investments
• The closing of the NDIS funding gap via the increased Medicare Levy
• SMEs with a turnover of up to $10m per annum will continue to be able to write off up to $20k, of business expenditure for a further 12 months
Help for the aged
• Restoring the pensioner concession card for those affected by the asset test changes introduced in January 2017
According to Scott Morrison, as a nation we are moving towards the end of difficult times with better times ahead. He maintains the global outlook is improving, and Australia is well positioned to capitalise on these developments.
It will be interesting to see how this budget is embraced by the general public and Australian businesses. Is it overly optimistic? Is Australia moving out of the doldrums? Is there an upturn strong enough to generate rising living standards? Most importantly, will Australian businesses respond with zeal to invest in growth? Or alternatively, will they continue to focus on cost control measures to the detriment of growth?
Confidence is a catalyst to growth and hopefully Australian consumers and businesses are somewhat buoyed by this budget.