Budget 2017 – The winners and losers – Australia

Here’s our round-up of the biggest winners and losers.

WINNERS

First home buyers

From July 1, 2017, young people will be given the option of piggybacking on their superannuation to access a kind of super-charged savings account, which will allow savers to salary sacrifice up to $30,000 – $15,000 in a single year – from their pre-tax income to later go towards a first home deposit.

It will receive the same favourable tax treatment going in and out as superannuation. The government says when it comes time to cash out, the scheme will leave savers about 30 per cent better off overall than if they went with a typical deposit savings account.

School students

Whether you get a shiny new iPad will very much depend on which school you go to.

An extra $18.6 billion will be injected into school funding over the next decade under David Gonski’s needs-based model, originally championed by Labor.

But the model will not discriminate between public, private and Catholic schools, so 24 of the nation’s wealthiest schools will experience “negative growth” in their funding and 350 “slower growth”.

More than 9400 schools will see an uptick in funding, however, as it increases from $17.5 billion this year to $22.1 billion by 2021 and $30.6 billion by 2027.

Medicare

The Government is hitting back at Labor’s “Mediscare” campaign with a new Medicare Guarantee Fund to cover essential healthcare.

It will provide $1 billion over four years from 2017-18 for the phased unfreezing of the Medicare rebate, starting with bulk billing incentives for GPs in July 2017, moving on to specialist consultations in 2018, specialist procedures in 2019 and diagnostic imaging in 2020.

Some medicines could be cheaper as more items are listed on the Pharmaceutical Benefits Scheme and doctors are encouraged to prescribe generic brands.

There will be an extra $2.8 billion in funding for hospitals, including $730 million for Tasmania’s Mersey Hospital.

The Medical Research Future Fund will get $65.9 million towards preventive health research, clinical trials and breakthrough research investments, and $5.8 million will be provided for research into childhood cancer.

Pensioners

The Government will provide $268.9 million over two years for a one-off winter energy payment in 2016-17 of $75 to singles and $125 per couple.

The pensioner concession card will be restored to those who lost it after the pension assets test change introduced earlier this year, so seniors will regain access to state and territory based concessions that were withdrawn after the change.

The Government will also provide $5.5 billion for home support services for the elderly as Australia’s population continues to age.

But the residency requirements will be tougher, with recipients required to have 15 years of continuous Australian residence.

Small business

More tax breaks and red tape reduction are on the cards this year, with the $20,000 instant asset tax write-off introduced in the 2016 budget being extended for another year until 2018, and opened up to businesses with an annual turnover of up to $10 million. The federal government is also offering states and territories up to $300 million in exchange for reducing red tape for small businesses.

Western Sydney Airport

The federal government is holding up their promise to build Western Sydney Airport after the owners of Kingsford Smith Airport decided not to take up the opportunity.

It will provide up to $5.3 billion in equity to establish WSA Corporation Limited from 2017-18 to develop the airport. Works are expected to commence by late 2018 and airport operations by 2026, creating 20,000 jobs.

Western Australia

Yes, the state that is facing a bleak future thanks to the end of the mining boom, but it will be getting a huge influx of much-needed federal government funding.

The state will get $1.6 billion to go towards a $2.3 billion road and rail infrastructure package in partnership with the state government. This will include a combined $1.2 billion towards the METRONET rail project and $100 million for better road access to the Fiona Stanley Hospital precinct.

The federal government will also top-up WA’s GST payment by $226 million.

According to the government: “This funding is in recognition of Western Australia’s low share of GST revenue”.

But the government is also putting the pressure on the WA Government to move forward with the Perth Freight Link. It says it will provide $1.2 billion to any future WA Government which proceeds with the project.

Regional areas

Those living in regional areas will be looking forward to some improved infrastructure. Firstly, the government will provide an extra $8.4 billion in equity investment to the Australian Rail Track Corporation to deliver inland rail from Melbourne to Brisbane.

A regional growth fund will invest another $472 million in infrastructure projects that back plans to “adapt to the changes taking place in the economy”.

There will be $28.5 million to establish the Regional Investment Corporation to streamline the delivery of $4 billion in concessional loans. This includes the $2 billion National Water Infrastructure Loan Facility and the $2 billion Farm Business Concessional Loan Scheme.

Tourism operators in Queensland

The government will provide $5 million in 2016-17 to help the Queensland tourism industry recover from the impact of Tropical Cyclone Debbie.

Funding of $3.5 million will be provided to the Queensland Government to fund tourism projects and Tourism Australia will undertake media advertising to promote the continued availability of tourist venues in North Queensland at a cost of $500,000.

Tourism Australia will also reprioritise $1 million of existing marketing investment funds to focus its current international coastal and aquatic campaign on Queensland destinations.

People worried about their gas bills

The government seems to be focused on increasing gas production to help keep power prices down. It is providing $86.3 million over four years from 2017-18 towards assessing three possible onshore unconventional gas sites and identifying potential environmental impacts.

It includes providing $28.7 million to encourage and accelerate responsible development of onshore gas for the domestic market.

There will also be a study to identify possible improvements to the National Gas Services Bulletin Board so users can view real-time data about gas availability.

Constraints on increase gas supply on the east coast of Australia, and of current and potential gas production in offshore South Eastern Australia will be examined.

The Australian Competition and Consumer Commission will be given $6.6 million over three years from 2017-18 to establish a monitoring regime for the gas market, meaning industry will have to provide more information about factors that impact supply and pricing.

LOSERS

Everyone

Sure, Medicare is getting a boost — but you’ll be paying for it. The Budget will hit most workers hard, with a $8 billion tax grab.

The Government will increase the Medicare levy from 2 per cent to 2.5 per cent of taxable income from July 1, 2019 to fund the National Disability Insurance Scheme.

You’ll only be exempt if your income is below the threshold of $21,655 for singles, $36,541 for families and $34,244 for pensioners.

Other tax rates that are linked to the top personal tax rate, such as the fringe benefits tax rate, will also be increased.

The measure is predicted to make $8.2 billion revenue for the Government over four years.

University students

University funding will be cut by $2.8 billion over four years. Students will face a 7.5 per cent tuition fee hike, phased in over four years starting in 2018.

The maximum increase for a four-year, government-subsidised degree will be $3600, with a maximum total cost of $50,000. A subsidised six-year medical degree will cost a maximum of $75,000.

Graduates will start repaying their loans at a lower income threshold of $42,000 instead of $51,957, high income earners (over $119,882) will pay 10 per cent of their income instead of eight per cent.

Income thresholds for repayment will be indexed to the consumer price index instead of the faster rising average weekly wages, meaning higher repayments to the government over the longer term.

Universities will have to meet a 2.5 per cent efficiency dividend, and their funding will depend on performance.

Anti-vaxxers

Parents who don’t vaccinate their children will be $14-a-week worse off, with $28 set to be wiped from their family tax benefits every fortnight.

The measure, which will start from July 2018, is expected to raise $15 million over four years, while sending a tough message to those who fail or refuse to immunise their children.

Social Services Minister Christian Porter and Health Minister Greg Hunt said last week that reducing fortnightly payments instead of withholding the end-of-year supplement would serve as a constant reminder to parents to vaccinate their children.

Welfare recipients

If you’re on Centrelink, expect to be hit by a tough new regime aimed at saving $632 million over the five years from 2016-17.

A crackdown on unemployed Australians with drug and alcohol habits will include penalties for those who fail to turn up to appointments or work-for-the-dole placements due to intoxication, with payments to be reduced or cancelled.

Anyone who does not show up without a reasonable excuse will have their payment suspended until they “re-engage” with their job services provider, and demerit points will be accrued for each incident.

The measures include a drug testing trial of 5000 new welfare recipients, and new rules making drug addicts and alcoholics ineligible for disability pensions for medical conditions “caused solely by their own substance abuse”.

Those who test positive to illicit drugs will have their welfare payments placed onto a cashless debit card, which can only be used to pay for legitimate living expenses.

The government will further penalise claimants who miss appointments and fail to update their information by removing backdating provisions.

And a crackdown on single parents will target those who fraudulently collect multiple payments, with single-parent households to be subjected to closer scrutiny to verify their relationship status.

Foreign investors

Foreign investors in Australian residential property are facing tougher rules, including the removal of the main residence capital gains tax exemption, tightened compliance and a cap 50 per cent sales to foreigners in new developments. There will also be a “ghost tax” of at least $5000 per year on all foreign investors who fail to either occupy or lease their property for at least six months of the year.

Banks

Big banks will be hit with a levy on liabilities of $100 million or more from July 1, to reap $6.2 billion for the government over the next four years.

Mr Morrison said it was “similar to measures imposed in other advanced countries, and will even up the playing field for smaller banks”.

But any customer deposits of less than $250,000 would be exempt from the levy.

A simpler system for Australians to resolve disputes with banks will also be established.

Mr Morrison also said Australians needed to get a fairer system from banks.

“Banks will also be held to account if they try and hide misconduct by executives with new mandatory reporting requirements,” he said.

Smaller banks would face fines of $50 million and $200 million for larger banks if they breach misconduct rules.

Foreign workers

As well as previously announced changes to the 457 visa system, the government will also introduce a levy on businesses that employ foreign workers.

From March next year, the levy on foreign workers on certain skilled visas will go towards a new Skilled Australians Fund.

Small business will have to pay $1200 per year for a foreign worker, along with a one-off $3000 payment. Larger businesses would pay $1800 a year per worker, along with a one-off payment of $5000.

This is expected to bring in $1.2 billion over the next four years to go towards training Australian workers.

Ex-pollies

Former Parliamentarians will lose their cushy travel entitlements, with the life gold pass being abolished for everyone except former Prime Ministers.

The measure will save $2.6 million over five years by stripping former MPs of the taxpayer-funded business class travel they previously enjoyed at taxpayer expense.

Former Prime Ministers will retain access to the entitlement, in order to meet the commitments that arise from their continued standing and involvement in the community.

Banana smoothie-loving hipsters

Your fashionable banana smoothies and tea tree oil skincare could cost even more as the Government increases agricultural levies and export charges on the request of the sector.

From July, there will be a levy of 25 cents per kilogram of tea tree oil sold domestically or exported, and the levy on bananas will increase by just under 0.5 cents per kilogram.

Of course, there is a slim chance sellers will take pity on the needy and not increase the retail price.

Fraudsters

The Australian Taxation Office will be given $28.2 million to crack down on serious and organised crime in the tax system, extending an existing measure to 2021.

It’s hoped this will help claw back $408.5 million in revenue, meaning a net gain of $380.3 million over four years.

The arts

Spending on arts and cultural heritage will decrease by 2.6 per cent in real terms from 2016-17 to 2017-18, and by 12.0 per cent in real terms over the period 2017-18 to 2020-21.

This includes programs that support funding for the arts and cultural institutions, reflecting the implementation of efficiencies and arts-related savings measures from 2014-15 and 2015-16.

Developing countries

Australia’s ever-shrinking foreign aid contribution will be cut by 16.9 per cent in real terms between 2016-17 and 2017-18 to $3.35 billion, and is forecast to decline by 3.4 per cent in real terms over the next four years to $3.6 billion in 2020-21.

Sweeping cuts to the foreign aid budget, which peaked at $5.6 billion in 2012-13, were initiated by the Abbott government in 2014, plunging Australia down the world generosity rankings and bringing total aid as a proportion of gross national income fall to its lowest level in the nation’s history.

Smokers

The war on durries continues. Roll-your-own tobacco and cigars will soon be more expensive under a plan to bring their tax treatment in line with pre-made cigarettes. The change will be phased in over four years from 2017 to 2020, to coincide with the existing annual 12.5 per cent tobacco tax increases which occur on 1 September each year. The move is expected to claw an extra $360 million in tax revenue from Australia’s brown, stained fingers over the next four years.

 

Source: http://www.news.com.au/finance/economy/federal-budget/the-winners-and-losers-of-budget-2017/news-story/92fabb65ade73ac3922bfaaae1c1720a