ECONOMY
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- Budget deficit of $35.1 billion for 2015/16
- Unemployment rate of 6.5 per cent for 2015/16
- Economic growth of 2.75 per cent for 2015/16
- Iron ore price assumed to be US$48 a tonne for next two years
Treasury forecasts suggest that Australian businesses will start to use much more of the spare productive capacity lying idle in Australia's economy over the next two years, with economic growth returning to "trend" by 2016/17. The unemployment rate is expected to peak at 6.5 per cent.
- Gareth Hutchens
SMALL BUSINESS
- Tax break for purchases up to $20,000
- Tax cut of 1.5 per cent for small companies
- Tax discount of 5 per cent for small unincorporated businesses
- Removal of fringe benefits tax on mobile devices
Small enterprises are being encouraged to go out and invest in their businesses through generous new tax deductions. There are also tax breaks that the government hopes will foster job growth. The tax measures for small business are the single biggest spending items in the budget.
- Mathew Dunckley
HEALTH
- Almost $2 billion in savings
- $400 million to be distributed from Medical Research Future Fund
- $1.6 billion to list new drugs
- More consumer choice in aged care
After last year's Medicare copayment nightmare, Sussan Ley has played it safe. There are baby steps to reform in reviews of Medicare, while PBS changes hinge on ongoing talks with the Pharmacy Guild. There are significant new savings, which will go to the Medical Research Future Fund, but most voters are unlikely to notice them.
- Dan Harrison
FAMILIES
- An extra $3.5 billion over five year for childcare
- Focus on lower and middle income families, as well as disadvantaged children
- Two year trial for nannies, at a cost of $246 million
The long-awaited childcare reforms will provide a big funding boost as well as simplify the childcare payments system into one basic payment that is means tested. But while the high-profile nannies trial will begin from 2016, parents will have to wait until 2017 to see the bulk of the reforms kick in.
- Judith Ireland
PENSIONS
- $2.4 billion saved by increasing asset test threshold and taper rate for the pension.
- Dumping 2014-15 proposal to index pensions to consumer price index
- $128 million for not going ahead with last budget's measure that would freeze income eligibility thresholds for three years
The government estimates 170,000 pensioners with "modest" assets will receive about $30 more a fortnight with its changes. About 91,000 pensioners will no longer qualify for the pensions a result of tighter assets tests, but they will keep their Commonwealth Seniors Health Card, in a policy that is likely to be seen as much fairer than 2014-15's reform attempt.
- Judith Ireland
TAX EVASION
The target will be 30 companies that book sales overseas in low-tax or no-tax nations
The government will also give the Australian Tax Office an extra $11.3 million over four years to implement new transfer pricing documentation standards
The ATO will get new info on large companies that give details on their tax affairs including a country-by-country report
The government is also working with business to develop a new voluntary code that will give public disclosure of their tax affairs.
As announced before budget night the government is targeting multinationals with over $1 billion in revenue by strengthening anti-avoidance laws.
- Nassim Khadem
WELFARE
- Young unemployed no longer have to wait six months for dole
- Unemployed up to the age of 25 wait four weeks
- Changes to keep 22-25 year olds on lower Youth Allowance delayed
The Coalition has scrapped one of the most unpopular measures of the 2014 budget and has backed down on forcing young unemployed to wait six months before receiving the dole. The waiting period has been cut back to four weeks and will apply to under 25s rather than the under 30s in the original proposal. The change will cost $1.8 billion. It is likely to be better received by the public but some will still worry that a month is too long to wait, especially for those living out of home.
- Heath Aston
EDUCATION
- University graduates to repay debts when overseas ($140 million over 10 years)
- The National Collaborative Research Infrastructure Strategy to be funded for two more years, funded by cuts to research support programs
- $4 million to establish Bjorn Lomborg's Consensus Centre methodology in Australia
- $16.9 million to improve teacher education, including toughened accreditation
After last year's sweeping changes to higher education, this year's budget is a dull affair. The budget papers assume the government's reforms - including full fee deregulation - will proceed, a bold assumption given they are stuck in the Senate. Cuts to research support programs will pay for scientific facilities to stay open and there's $16.9 billion to improve teacher training.
- Matthew Knott
SCIENCE AND INDUSTRY
- $105 million for car manufacturing assistance
- $20.5 million for the Australian Synchontron
- $26.8 million cuts to Cooperative Research Centres
- $31.7 million cuts to industry grants programs
Car manufacturers will benefit from a reversal of cuts to industry assistance while the Australian Synchontron facility will receive a funding boost. But there are cuts to Co-operative Research Centres and grants for commercialisation of research.
- Matthew Knott
IMMIGRATION AND FOREIGN AID
- Christmas Island will wind down its operations in 2016
- Increased spending on patrol boats
- Indonesia loses 40 per cent of its aid
- Aid to Africa has been slashed by 70 per cent
Foreign aid to Africa has been completely decimated as the government focuses on the Pacific, while Indonesia has lost 40 per cent of its aid. Countries that have asylum seeker deals have been spared. The focus of the Immigration Department has moved decidedly towards security and protecting Australia's borders as the number of asylum seekers reaching Australian shores has diminished.
- Sarah Whyte
INFRASTRUCTURE
- Government remains committed to Melbourne's East West Link motorway, will not redirect funding
- No new money for road or rail projects in Sydney or Melbourne, beyond last year's promises
- Potential privatisation of the Australian Rail Track Corporation, owner of interstate tracks
- Commitment remains to Badgerys Creek Airport in Sydney, but no new funding beyond $2.9 billion for nearby roads
Residents of northern Australia were the main beneficiaries of government largesse in Tuesday's budget, after Treasurer Joe Hockey announced $5 billion in cheap loans for projects in the region. Struggling with declining revenues, the Abbott government failed to find extra money for new road and rail projects in the country's major cities.
- Josh Gordon and Jacob Saulwick
ENVIRONMENT
- $100 million extra over four years for the government's Reef Trust for water quality projects on the Great Barrier Reef
- Climate Change Authority's funding extended for two years by $6.1 million while it reviews Australia's climate polices
- Direct Action funding continues as forecast last year with $1.5 billion for the next four years.
The reef receives extra money as the government tries to avoid an in-danger listing by UNESCO. But it will accommodate this through savings elsewhere – including $73 million from the Green Army. Funding continues for Direct Action, and the Climate Change Authority – slated for abolition – has new funds. Less fortunate was the Clean Energy Finance Corporation which is still set for abolition.
- Lisa Cox
DEFENCE AND NATIONAL SECURITY
- ASIS receives big IT and capability boost of $296 million
- $237 million for a new building for Australia's embassy in Washington, as well as $98 million for new diplomatic posts in PNG, Qatar, Indonesia, Thailand and Mongolia.
- The war against the Islamic State to cost $360 million next year.
- $244 million over the next two years to maintain the high-security embassies in Iraq and Afghanistan.
Foreign intelligence agency ASIS gets a big $296 million spending boost – roughly 14 per cent a year for the next four years, mostly for IT. Defence remains static, though the $360 million cost of fighting Islamic State in Iraq next year has added to its overall spending.
- David Wroe
The story Your five-minute budget summary first appeared on Brisbane Times.
