8 May 2018Hot off the Press
Image credit: Alice Workman
Tonight at 7:30 AEST, federal Treasurer Scott Morrison will unveil the Australian Government’s proposed budget for 2018–19.
Maintaining tradition, the Treasurer has been typically cagey about what will be in the budget, giving few hints as to the content in the customary Budget Day doorstop interview.
“Wherever you are today in Australia, the economy we all will live in in this country over the next 10 years will determine so much for our lives,” Mr Morrison said.
“The plan for a stronger economy that I’ll be announcing tonight is about improving the opportunities for all Australians to live in a stronger economy. It’s a plan for lower taxes and for reducing the pressure on households.”
Some aspects of the budget have, however, been announced, or are likely.
The main thrust is expected to be debt reduction, tax cuts, infrastructure spending and aged care, with a budget surplus predicted for 2019–20 — one year early.
Here’s what we can expect from the budget.
Low- and middle-income earners are expected to experience between $2.50 and $10 per week in tax relief ($135–$500 per year). The low-income tax offset (LITO) threshold will be increased from $66,667 to $125,000, which will benefit about 92% of working Australians.
Further, the $87,000 tax bracket will be raised to $90,000. This will save those earning $90,000 about $135 per year.
The 40% tax on small kegs is expected to be abolished, which will equalise tax for craft brewers, and $140 million has been allocated for rebates to encourage foreign filmmakers to film in Queensland.
While these modest adjustments will take some pressure off low- and middle-income earners and families, opposition spokesperson Tanya Plibersek claims that the Government also intends to propose $80 billion in tax cuts for larger businesses, including banks.
Ms Plibersek has said that this will paid for by cutting the family tax benefit, and taking money from schools and hospitals.
“You’ll see tonight, a budget built on wrong priorities, where ordinary families are hurt [s]o that the Government can pursue its big business tax cuts, including the $17 billion cuts to the banks’ tax bills,” said Ms Plibersek.
No change is expected to unemployment benefits, despite business, industry, and community groups calling for an increase in the Newstart Allowance, claiming that the rate is so low that it makes it difficult to search for work.
Mr Morrison dismissed this, saying that “there were 410,000 jobs created last year, which I think provide a counter-factual to that.”
However, pensioners will be able to earn up to $250 per fortnight without affecting their pensions.
Changes to the Pension Loans Scheme are expected to allow retirees to supplement their income by borrowing against the value of their home, and the budget will likely allocate more money for training so that older Australians can stay in work for longer.
The Medicare rebate freeze for GP visits will be lifted, and rise up to 55 cents.
The Government is expected to commit $241 million to list nusinersen — sold as Spinraza — on the Pharmaceutical Benefits Scheme, reducing the costs to young patients suffering from spinal muscular atrophy. Patients under 18 will also benefit from a cap of $39.50 per script filled.
Pregnant women will receive free whooping cough vaccinations under a $39.5 million immunisation initiative.
$34 million will be allocated to mental health charity Lifeline.
The Government will also allocate $100 billion over five years for an aged care package that will focus on cutting the in-home care waiting list, and create 20,000 new places for recipients.
Around $25 billion in infrastructure expenditure is expected to be announced. The Government has indicated it will spend $400 million to extend the Port Botany rail line in Sydney to encourage greater rail freight and ease congestion.
$5 billion will be spent on the Melbourne Airport Rail Link, and the Government has said it will fund 80% of the Bruce Highway upgrade in Queensland.
The Government is also expected to allocate $500 million for preserving the Great Barrier Reef, which will be spent on building the Reef’s resilience, encouraging changes to farming practices, reducing sediment run-off, improving water quality, and targeting coral-eating crown-of-thorns starfish.
$50 million in seed funding will be allocated to establish an Australian Space Agency, with the private sector intended to cover the bulk of the long-term costs.