Budget’s tiny $10-a-week tax cuts
AUSTRALIANS on low and middle-incomes are set to receive tax cuts of around $10 a week in today's Federal Budget, it has emerged.
Treasurer Scott Morrison was forced to defend himself against accusations the cuts will only be sufficient for a "burger and milkshake" as he more than doubles the maximum tax offset from $445 to $1000.
The Low Income Tax Offset for people earning under $37,000 a year currently gradually reduces until they reach an income of $66,667, but Mr Morrison is expected to extend this to those on salaries of up to $90,000, the ABC reports.
That will mean an extra $10.50 a year for workers on the maximum benefit, at a cost of around $4-5 billion annually.
Asked whether the cuts would just be enough to buy a "burger and a milkshake", Mr Morrison told Nine News on Sunday: "I'm not going to pretend that these are going to be mammoth tax cuts, or anything like that, that wouldn't be responsible. They will be what is affordable, they will be real and they will be within what the Budget can afford."
The tax cut will be introduced on July 1, with recipients receiving the boost in an end-of-year tax rebate. But high-income earners will be protected from having to pay more taxes.
Opposition finance spokesman Jim Chalmers indicated Labor would support the tax cuts, but added: "I don't think any income tax cut in the Budget tomorrow night can properly make up for the damage that's been done to families in this country over the last five years.
"It won't completely unwind the pain which has been inflicted on people by the Liberal Party, really since the first 2014 horror Budget."
TRACKING BACK TO A (VERY SLIM) SURPLUS
The Treasurer is also set to announce a plan to return the budget to surplus in 2019-20, a year earlier than previously forecast - but only by a slim margin of around $3 billion, according to The Australian.
The Government plans to keep growth in spending to no more than two per cent, allowing for inflation.
Spending is expected to be $10bn less in 2017-18 than forecast in the Abbott government's unpopular 2014-15 Budget.
Acting Prime Minister Michael McCormack this week indicated the Government would pay off its massive $523bn debt by 2021.
"(Mr Morrison's) looking forward, as he says, to producing a fiscally responsible budget," he told reporters in Mildura. "He's looking forward to getting this nation back on track, so that by 2021 we've paid down Labor's debt."
For this financial year, a deficit of $23.6bn has been forecast, although the Government's most recent monthly financial statement suggests the budget is running about $8 billion better off than forecast.
But former treasurer Peter Costello said most of us will be dead before Australia's national debt is paid off.
Mr Costello told ABC's 7.30 on Monday night that the Turnbull government had not done enough to control debt.
"We've now had ten years of deficit," he said. "Cumulatively, that means to cover that, we've had to borrow about $370 billion. We went from having no net debt to borrowing about $370 billion.
"That money doesn't go away. It's going to be there, we're going to be paying interest on it until somebody pays it back."
The Coalition claims it has achieved a $41bn budget improvement through measures brought in since 2016.
These include the $5.5bn bank levy, as well as $4.1bn in high-income superannuation limits and $1.4bn in cuts to the public service. A freeze on family benefit thresholds was also extended, meaning another $1.4bn for the public purse.
The Government has also clawed back money through tightening eligibility for the disability pension, cracking down on welfare "overpayments" and reducing the number of jobseekers on Newstart and youth allowances by 5.5 per cent.
An increase in the Medicare levy worth $8.2bn over three years did not pass the Senate, however.
The Government is still keen to give tax cuts to large companies, but these were not passed in Parliament either, so only firms with a turnover of up to $50 million will receive cuts over the next decade - from 30 per cent to 25 per cent.
BILLIONS FOR BABY BOOMERS
He has also prepared a multibillion-dollar aged-care and retirees package including 20,000 extra home-care places to enable the elderly to stay in their houses longer and incentives for retirees to start businesses, the newspaper revealed.
More than 100,000 elderly Australians are on the waiting list for home-care places.
The package is also set to expand the Work Bonus program, which allows seniors to earn $250 a fortnight without affecting their pension, and the Pension Loans Scheme, which allows self-funded retirees to borrow against the value of their home.
However, aged care previously faced $2bn in cuts, with elderly people hit by changes to superannuation tax and pension reforms.
SUPER START FOR THE YOUNG
There will be some tweaking of superannuation rules to help young people get started, and consolidate super accounts and recoup any that is lost, the Australian Financial Review reports.
The increase in superannuation guarantee to 12 per cent is expected to be delayed until July 1, 2025. The Gillard government had intended to reach this milestone by July 1, 2019.
Young people may also be pleased at the news last week that smaller breweries and distilleries will enjoy a tax cut, with a concessional draught beer excise rate extended to smaller kegs. But these businesses will not necessarily pass on the saving to customers.
For the very young, a $240m program to put 2300 chaplains into schools will be renewed, according to The Australian, while Julie Bishop announced that $140m would go towards encouraging filmmakers to produce blockbusters in Australia.
Acting Prime Minister Michael McCormack has promised a record spend on infrastructure nationwide, including $5bn for a rail link from Melbourne Airport to the CBD.
Queenslanders can expect a $3.3bn upgrade for the Bruce Highway, $1.5bn for northern Australian strategic roads, $1 billion for the M1 Pacific Highway and $300m for the Brisbane Metro project.
There will be $3.2 billion for projects in Western Australia, including extending the Mitchell Freeway and Metronet and a Tonkin Highway upgrade. In Sydney, $400m will be put towards duplicating the Port Botany Rail line.
The ABC reported last week that the Government will unveil "seed funding" of $50m to establish an Australian space agency.
REEF GRIEF, CAPTAIN COOK AND ILLEGAL CIGARETTES
The Government will make single largest investment in the Great Barrier Reef in Australian history on May 8 - but conservationists say it's still not enough to address the threat climate change.
A tobacco taskforce will be set up to crack down on the illicit trade and raise $3.6bn in revenue over four years.
The Coalition has also pledged $50m for revamping Sydney's Botany Bay, where Europeans and indigenous Australians first met, including erecting another statue of Captain Cook in time for the 250th anniversary of his arrival in 2020.
Other measures will include slashing the cost of a lifesaving spinal muscular atrophy drug, introducing free whopping cough jabs for pregnant mothers and more funding for mental health helplines.