Australian Treasurer Josh Frydenberg addressed parliament
“Mr Speaker, the fundamentals of the Australian economy are sound. But there are genuine and clear risks emerging both at home and abroad. The residential housing market has cooled, credit growth has eased and we are yet to see the full impact of flood and drought on the economy.
Global trade tensions remain, the Chinese economy has slowed and there has been a loss of momentum in Japan, Europe and other advanced economies. Not withstanding these challenges, it is a testament to the strength of the Australian economy that it is in the 28th year of consecutive economic growth.
Our economic plan will see this continue. GDP growth is expected to pick up to 2.75% in 2019-20. We have delivered ahead of schedule on our promise to create more than 1 million new jobs.
We now commit to creating another 1.25 million new jobs over the next five years.”
Some interesting notes from this years Federal Budget
In an election year we expect to see big tax cuts and incentives which are designed to win votes but these won’t get legislated prior to the election. With more than 10 million taxpayers set to benefit, the announced tax relief will be available to Australians after tax returns for the 2018-19 year are submitted in just 13 weeks’ time. This tax relief is designed to lift household incomes, ease cost of living pressures and boost spending at local businesses.
The government is more than doubling the low- and middle-income tax offset from 2018-19. Taxpayers earning up to $126,000 a year will receive a tax cut. For a single-income family, this means $1,080 and for families on a dual income, this is up to $2,160 per year in your pocket.
This year high income earners miss out so if you earn over $126,000 there’s nothing for you, no tax cuts, this financial year. Labour are already accusing the coalition of this being insignificant and if returned to government they would give Australian’s the tax cuts they deserve.
The second change announced was a reduction in tax rates but not until 2024. The planned change is to lower the 32.5% tax rate to 30% from 1 July 2024, covering all taxpayers earning between $45,000 and $200,000. This change will mean that 94% of all taxpayers in Australia will pay no more than 30 cents in the dollar tax from 2024.
Small businesses were also provided some additional relief with taxes being cut to 25% and the instant asset write-off increasing from $25,000 to $30,000 and now covering businesses with a turnover of up to $50 million. On the flip side, if your business pulls in more than $50 million there are no tax cuts.
Changes to superannuation that allow people aged 65 and 66 to make contributions without meeting the current work test. Currently anyone aged between 65 and 74 must work at least 40 hours a month if they want to make voluntary contributions to their super. But from 1 July 2020, the age limit will be increased so those aged 66 and 67 can make extra payments into super even if they are not working. Spouse contributions age limit has also been increased up to the age of 74, rather than 70. Anyone aged under 67 will also be allowed to make up to three years worth of voluntary contributions in one year. This means they will be able to put up to $300,000 in their account in one year (if they haven’t put any other extra money into super in three years).
The Coalition government announced plans to boost infrastructure spending to $100 billion over the decade without increasing taxes. Funds will be used across Australia to deliver new infrastructure projects to ease city congestion, unlock regional potential, better manage population growth and to improve road safety with Victoria and Queensland benefitting the most. The standout item is a $2 billion fast rail connection between Geelong and Melbourne. It will be the fastest train in Australia, with an average speed of 160km/h, and will cut commuters’ travel time in half to 32 minutes. The government is funding business cases for five more fast rail proposals in New South Wales, Victoria and Queensland.
Telecommunications & Internet
Included with the budget papers was a blue book called Building Stronger Regional Communities. Many areas of improvement in our regional areas are being addressed including funding to further improve telecommunication and internet. There is $160m for two more rounds to address mobile blackspots and $60m to address internet and mobile access.
North Queensland Funding
Flood Recovery Funding – Much of the relief measures have already been announced but much needed interest rate relief and support of new loans for eligible flood effected sheep and cattle producers was confirmed. There is also $4m for north Queensland schools affected by disaster to ensure ongoing viability and a one off payment of $1,000 per student for isolated families already receiving support through the Isolated Children scheme or Abstudy.
One of the plans around revenue raising is the automation of social security payments. Departments will also increase data sharing to ensure there are fewer over-payments to welfare recipients and it is expected that these measures will save $2.1 billion over five years.
The Government will end the indexation on Medicare rebates a year earlier than planned which will make it cheaper to access 119 GP services and cost the Federal Government $187 million. There’s $448 million for a new primary care funding model aimed at people living with complex and chronic conditions and new drugs will be listed on the PBS costing $331 million over five years.
The Government confirm it will put $2bn into the Climate Solutions Fund. This follows on from the “Direct Action” approach known previously as the “Emissions Reduction Fund”. This involves large companies bidding for funding to reduce their emissions, in a kind of reverse auction. The government said Australia was on target to exceed our 2020 target under the Kyoto protocol. The $3.5bn investment in a Climate Solutions package would deliver on Australia’s Paris commitment to reduce emissions by 26% to 28% below 2005 levels by 2030.