The Federal Government unveiled its 2015 budget last night, revealing some good, bad and just plain weird decisions.
After the harsh reaction to last year’s budget, the Government has clearly attempted to win back the support of the electorate with this one. But even a budget designed to win an election has to have winners and losers — here’s who came out on top this year.
Great news for small businesses with an annual turnover under $2 million — your tax will be lowered to 1.5 per cent, at a $1.45 billion cost to the Government.
If you’re an unincorporated business — think sole traders, partnerships and trusts — the news gets even better. You’ll receive a 5 per cent tax discount.
The Government will also provide you with an immediate tax deduction of all assets under $20,000 to help you invest in new tools and machinery, starting from budget night. So why are you even reading this? You should be at your local Bunnings right now…
Parents with young kids
In one of the budget’s big sweeteners for families, $3.5 billion has been earmarked to boost access to child care over five years.
That’s unequivocally good news — unless you’re going to be affected by the cuts to welfare from the last budget, which need to be passed in order to fund the childcare package.
From July 1 2017, parents will be able to access the Child Care Subsidy, which will subsidise a percentage of your overall childcare fee. If your family earns $65,000 or less, you’ll have 85 per cent of your fees subsidised. If your family earns $170,000 or more, that’ll drop to 50 per cent.
The nanny subsidy will also come into effect, with shift workers and people in rural areas being given access to a $246 million pilot program to help them find their own Fran Fine.
You know that one friend of yours you really like hanging out with, but you just can’t bear to spend any time with their terrible partner? Medical research played that role in last year’s budget — everybody was happy to see it, but it was inextricably tied to the deeply unpopular GP co-payment.
Well, much like your friend who finally wised up and dumped that loser, the medical research policy is back in this year’s budget — without the GP co-payment. $400 million has been dedicated to the Medical Research Future Fund in this year’s budget. It’ll be paid for as part of the Government’s review of medical procedures, which they’re hoping will turn up $1 billion in savings.
It’s unclear, at this stage, where that $1 billion saving will come from — so maybe the medical research policy is more like your friend who eventually gets back together with their terrible partner?
Farmers doing it tough have been thrown a $250 million lifeline, which will keep the Drought Concessional Loan Scheme going for another year. They’ll also be able to claim fences and new water storage as tax write-offs.
$35 million has been set aside for infrastructure in drought-affected areas, and $25 million will be put towards helping farmers combat the impact of pest animals.
Recognising that drought has an emotional impact, too, $20 million will go towards community support services. $1.8 million has been put aside for more counsellors.
Joe Hockey has anointed himself as the King in the North with this budget, which includes a Northern Australian Infrastructure Policy that Hockey says will “unleash our nation’s potential”. The Facility will make $5 billion available for concessional loans for infrastructure in the north.
Hockey has also bestowed $101.3 million in funding over four years to the north to improve road infrastructure for cattle supply chains.
No, Joe Hockey hasn’t seen The Red Wedding yet. Why do you ask?
Somehow, this is still a thing. The Government will shell out $60.6 million for school chaplains every year for the next four years.
Okay, this one is a little weird. $250,000 has been set aside in the budget for a flagstaff in Bathurst — it’ll be placed on the spot where Governor Lachlan Macquarie first proclaimed the future of Bathurst, and for that sort of money, it should look spectacular.
Freedom isn’t free — there’s a hefty fee. This year, $450 million has been put aside in the budget to boost national security.
Here’s how that breaks down:
- $296 million will go towards boosting the technological capabilities of intelligence-gathering agencies.
- The Australian Border Force gets $50 million to train its border protection officers.
- $131 million goes to the telecommunications industry to help it comply with metadata collection laws. The new laws force telcos to store your metadata for two years.
- $22 million will go to social media monitoring to help counter the online propaganda of groups like the Islamic State. Yes, we’re paying somebody $22 million to check Facebook, but it’s for a good cause.
Our military operations in Afghanistan, Iraq and the Middle East will also get a $750 million boost, as part of an effort to combat terrorism at its source.
Most people can generally get behind a budget that isn’t good for terrorists, but this one is a little thornier. Up to 80,000 expectant parents will be $11,500 worse off, as the Government clamps down on “double dipping”. Previously, expectant mothers were able to access 18 weeks of leave at the minimum wage on top of any private leave they had. Now, people with workplace schemes more generous than the Government’s won’t be eligible for any payment, and those with less generous schemes will only be able to access the gap between the two.
The Government expects to save $1 billion by cracking down on, you know, mums.
They’re really doubling down on this, aren’t they? As part of the Government’s plan to get mums back to work, stay-at-home parents with a family income of more than $65,000 per year will no longer be eligible for any childcare assistance.
Roughly 91,000 people will lose their pension payments and another 235,000 will be worse off after the Government tightens the assets test for the age pension. Pensioners with assets of more than $823,000 (excluding the family home) will no longer receive any pension payments; the threshold used to be $1.15 million.
In a bid to “level the playing field” for Aussie businesses delivering digital content, the Government has introduced what’s being dubbed the “Netflix tax”. This will see the GST expanded to cover digital purchases from overseas companies, potentially raising the price of e-books, online games, music subscriptions, apps from Microsoft and Blackberry, and, yes, Netflix. It won’t affect Apple and Spotify, however, because they already collect GST from Aussie consumers.
The scheme won’t take effect until July 2017, though, giving you plenty of time to burn through Daredevil, House of Cards, Orange is the New Black, and any other Netflix shows worth watching before the price goes up. You might just need to call in sick for a few years.
Backpackers on working holiday visas will no longer be able to claim the same $18,000 tax-free threshold as you. In fact, they’ll have no threshold. This ensures that all backpackers will pay tax on every dollar in Australia, because there’s no way any of them are doing dodgy cash-in-hand work, right?
The Government’s ‘no jab, no pay’ policy will crack down on parents whose children don’t have up-to-date vaccinations. Unless they’ve got a medical exemption, they’ll no longer be eligible for the Family Tax Benefit Part A end-of-year supplement, potentially saving the Government up to $508 million going forward. Thrifty and responsible.
The Government will save $244 million over the next four years through job cuts in the education and health departments; 35 Government bodies will also be axed. Lots of people with lots of time to watch Netflix, then.
Climate change spending will take a sharp drop, going from $1.35 billion in 2014-15 to less than half that ($550 million) in 2018-19. Alternatively, you could put ‘carbon emissions’ in the Winners column.
$980 million has been slashed from the foreign aid budget. Quite a lot of that is coming from aid to Indonesia, which has been cut by 40 per cent (from $542 million to $323 million). Joe Hockey says the cuts were determined according to a fixed formula — it’s nothing personal, guys.
What did you think of this year’s budget? Have your say in the comments below!