Treasurer Joe Hockey has delivered his second and potentially final budget tonight with a focus on small business, reducing the budget deficit, acknowledging the drop in iron ore prices, allocating more money for northern Australia counter-terrorism and helping farmers. In delivering the 2015 Federal Australian Budget, the government has had to deal with pressure from the Australian public after nearly a year of protests and also simmering discontent among its own Coalition ranks with nervous backbenchers slowly reflecting on February’s leadership issues.
Multinational corporations and businesses will face tighter controls on shifting profits to foreign tax havens with the introduction of a new anti-tax avoidance legislation. The government has avoided making any changes to superannuation within this term of government although there will be increased means testing from 2017 to be eligible for the aged pension. The asset test for part pensions which will not include the family home will be lowered to $820,000 for couples. The $20 million dollar medical research fund will go ahead with changes to the Pharmaceutical Benefits Scheme to save $3 billion over 4 years. A number of over-the-counter medicines will no longer be subsidised. The government has also announced a major $3.5 billion childcare reform package with direct payments to childcare centres to reduce parents’ upfront costs. Families earning over $65,000 with stay-at-home parents will no longer receive childcare subsidies. Centrelink will also receive a $1 billion upgrade to their computer systems to crack down on welfare cheats by improving identity and data matching abilities.
The government’s budget also is cracking down on tax avoidance from multinational corporations as well as ending tax free working holidays for foreigners and expanding the GST for digital goods. Prior to the Treasurer’s budget speech tonight, the government released some details on its policy for business, superannuation, aged pensions, health, childcare and for cracking down on welfare cheats.
The government expects to return to surplus in 2019/2020. Current GDP Growth is projected to increase 1% over the next 5 years. The ‘nation building’ agenda of the government has remained despite changing from its austerity budget approach last year. The government is trying to move forward from last year’s heavily criticised budget as it continues to attempt to find savings despite a revenue downturn. Net Debt is expected to peak in 2 years at 18% of GDP at $313 billion. The government is encouraging more workplace participation whilst continuing to fight in the Senate over some of last year’s budget measures that have been blocked. Despite the Treasurer dealing with a $82 billion deficit blowout, Joe Hockey has declared that “Australia’s best days are ahead” in this year’s budget.
Budget 2015: Winners
Budget 2015: Neutral
Budget 2015: Losers