Below are the key new measures announced in the 2014 Federal budget, provided by Bernard Keane and our sister publication Crikey who joined journalists in the lock-up on Tuesday. We’ve highlighted the areas we believe may directly affect you and your family.
Increased revenue:
- The much-anticipated deficit levy: as expected, there’ll be a rise in income tax rates for taxable incomes above $180,000 for 2014-17 that will raise $3.1 billion over the forward estimates (all that political pain for $3 billion?). Individuals on $180,000 and above will pay an additional 2% of income above $180,000.
- Fuel excise indexation will be reintroduced from August, raising $2.2 billion over the forward estimates. The amount raised each year by additional indexation will form the minimum to be spent on roads.
Spending cuts:
- A $7 co-payment for GP visits from 1 January 2015. The government cuts payments to GPs by $5 a service, with the saving notionally directed to a new Medical Research Fund.
- Increases in foreign aid in previous budgets (and until recently part of the bipartisan target of 0.5% of Gross National Income going on aid) will be scrapped, meaning a cut to foreign aid of $8 billion over the next five years, with aid frozen at current levels and then only indexed according to domestic inflation.
- Lowering the threshold for repayment of higher education HELP loans to $50,638 from 2016 and increasing the interest rates, generating $3 billion across the forward estimates.
- Freezing Family Tax Benefit payments for two years (saving around $700 million a year) and reducing access to Family Tax Benefit B to families with children under six and earning under $100,000 (saves $3 billion).
- Reducing access to Pensioners and Seniors Card Holders ($300 million a year).
- Pausing indexation of a wide range of governments grants.
- Confirmation that the Direct Action climate plan will be limited to $2.55 billion over 10 years, rather than the original $10 billion.
- A 1% efficiency dividend for both the ABC and SBS as a “down-payment” on future cuts “being considered by the government and the public broadcasters over coming months”.
- A rise in the PBS co-payment of $5.
New spending initiatives or tax cuts:
- As promised by the Coalition, a cut in the corporate tax rate by 1.5% points for small and medium firms from 1 July 2015.
- An “Asset Recycling Initiative” — $5 billion to encourage states to sell assets and reinvest in infrastructure.
- A claimed $3.7 billion infrastructure package for roads investment, aimed to roll out immediately. Labor claims, with considerable evidence, that many of the projects are Labor-era projects re-announced and already funded.
- A bring-forward of Defence capital spending of $1.5 billion, offset by a later $520 million delay in out-year spending.
- A Medical Research Fund to be built up from health portfolio savings, advertised as a “$20 billion fund” but it won’t reach that level for a generation: the Commonwealth’s initial investment will be $1 billion over four years.
- An extra $250 million for the School Chaplaincy program over five years, with “simplified reporting and administrative requirements”.
Other initiatives:
- A rise in the pension age to 70 by 2035.
- Indexation of pensions (aged, carers) according to CPI, not wages growth, from 2017.
- Jobseekers up to 30 prevented from accessing Newstart or Youth Allowance for a six month “waiting period”, then limited to six months before being removed from income support, before being permitted back on after a further six months.
- Privatisation of Australian Hearing, Defence Housing Australia, the Australian Securities and Investment Commission registry function (some might suggest ASIC in its entirety could be privatised given the extent of industry capture) and the Royal Australian Mint.