It's been a blast
Fun as it has been, I think that will do us for this evening. Let’s take stock of the day’s developments.
- The government’s budget gives with one hand, offering high income earners and businesses a tax cut, while taking with the other hand, as my colleague Lenore Taylor puts it: “Squeezing revenue from wealthy superannuants, smokers and multinational tax avoiders.”
- People in the middle, earning between $37,000 and $80,000 get nothing.
- Labor says it will back the new tax cut for high income earners (but keep the deficit levy), while opposing a company tax cut if it applies to big firms.
A couple of very quick thoughts from me about the sum of the parts.
There’s some worthwhile policy here: the super stuff is good, I think the welfare to work stuff looks interesting.
But predominantly it’s a budget about an election slogan: jobs and growth. That’s where the Coalition wants to fight because it thinks it can outbox Labor in that political and policy territory. The government wants to pit its aspirational entrepreneurial tone against Labor’s active government, putting people first tone.
That’s a genuinely interesting electoral contest.
Thanks to my colleagues for all their input through the course of the day. Magic Mike and I will be back first thing tomorrow, with more funny numbers, funny talk and the whole shebang. Have a great evening.
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A last run of interest group reaction.
- Acting general secretary of the National Tertiary Education Union, Matthew McGowan, said the tertiary education sector had been cut by $2.5bn and $100,000 degrees were still “very much on the table”.
- The president of People with Disability Australia, Craig Wallace, welcomed NDIS funding but said he was “quite concerned about the NDIS savings fund arrangements – we should not be forced to choose between disability supports and having an income as a person with a disability. We think they’re setting this up for some unhappy trade-offs going forward, between specialist supports and income supports.”
- The Australian Council of Trade Unions president, Ged Kearney, said four out of five working Australians would be “incredibly disappointed”. She said it was a “fudge-it budget” which did not contain a jobs plan for 800,000 unemployed and 2 million people looking for work or underemployed. The “Google tax” would raise just $200m, and only 1,000 of 4,000 jobs cut from the Australian Taxation Office had been restored.
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Thumbs down from aged care.
- Aged and Community Services Australia’s John Kelly said he was disappointed at the $1.2bn cut to aged care homes which would primarily cut staff numbers to look after older people. He said the average age of residents was 85 and increased frailty mean more staff were required. However with the cuts over four years, staffing levels would be reduced.
Thumbs up from small business.
- Peter Strong of the Council of Small Business Australia was effusive. “We thought last year was good but this year, we think it is genius. And we did not seek it.”
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In the event you missed this live at 7.30pm, here is Scott Morrison, delivering budget 2016.
Meanwhile on the boulevard of broken dreams®
®Mike Bowers
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More reaction, the AMA, unions, accountants, charities, farmers, community legal centres.
- The Australian Medical Association president, Brian Owler, said: “Tonight we’ve seen an extension of the Medicare rebate freeze, which means $925m more out of the pockets of everyday Australians … The freeze is constantly undermining the value of Medicare ... GPs have absorbed the rebate freeze, but we will start to see people – particularly with the extension for another two years – say we can’t sustain it anymore, we’re going to have to start to charge our patients. We’ll start to see that tipping point where Medicare patients will be charged and bulk billing rates will fall.”
- The Community and Public Sector Union national secretary, Nadine Flood, said: “There’s nothing innovative about billions of dollars of cuts to the public service; there’s nothing innovative about 22m calls to Centrelink going unanswered last year, and now we face even worse with more cuts to come including a $1.9bn so-called efficiency dividend.”
- The St Vincent de Paul Society chief executive, John Falzon, said: “The treasurer wants us to live within our means but this budget does nothing to allow ordinary people to have the means to live … Tonight’s budget, like its predecessors, entrenches inequality rather than fighting it.” Falzon cited cuts to $13bn in cuts to payments and $1bn in cuts to services. “A good budget would not leave people outside the labour market a daily battle for survival from below the poverty line.”
- The National Association of Community Legal Centres chair, Roslyn Munro, said: “Tonight we are disappointed the government did not stop the cuts to community legal centres which will apply from 1 July 2017. We already turn away 160,000 people who need free legal advice ... these cuts will mean we turn away even more people that need our services.” She said it was unclear where further funding for family violence would be spent, but it appeared to not be allocated for community legal centres.
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Tony Mahar, chief executive National Farmers Federation, said: “The government has not delivered a commitment to remove the backpacker tax, which will have a significant impact on Australia’s farmers.”
- The Chartered Accountants of Australia and New Zealand head of leadership and advocacy, Robert Ward, said the budget showed “a lack of fundamental reform, it was a typical election budget. It won’t lose any votes.”
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Greens say the budget is a let-down, like the prime minister
Greens leader Richard Di Natale has described the budget as “a massive let-down, like Malcolm Turnbull turned out to be”.
“Politicians like us get two tax breaks and the average taxpayer misses out.”
The budget, he said, is silent on global warming and yet it provides $110m for mineral exploration.
The Greens MP Adam Bandt said the budget had failed by providing a corporate tax cuts while removing $4m from schools and hospitals. He said superannuation was a missed opportunity, cutting only $3bn from superannuation when the Greens identified $12bn worth of savings.
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Some reaction now from various interest groups. Welfare groups, universities and seniors first up.
Australian Council of Social Services chief executive, Cassandra Goldie, said the budget “unfortunately locks in really harsh cuts, including $13bn of harsh cuts from the 2014 budget that were yet to be legislated, introduces some new harsh cuts including to disability and extraordinarily a cut to the unemployment payment”.
Goldie criticised the fact only the top 20% of income earners would get tax cuts and “it is costing the budget a lot over the forward estimates”. She said the $6 of “modest relief ... probably won’t do anything to economic growth”.
She welcomed recognition that “Work for the Dole was a failed program that didn’t achieve anything anyone could celebrate” in favour of funding for “real work experience programs for young people”.
The Universities Australian chairman, Barney Glover, said the budget was a “mixed bag” for the higher education sector. He welcomed an options paper for university funding, but said it went along with $2.5bn of cuts over the forward estimates. “We have some unfortunate cuts beyond that”, including a 20% cut to the higher education participation program, which is for people from disadvantaged backgrounds to access university.
National Seniors Australia’s chief executive, Michael O’Neill, welcomed superannuation changes as “measured and modest, and appropriate for this time given the fiscal outlook”. He welcomed changes for low-income earners, people with low super balances and women, and the ability for people over 65 to contribute to their super accounts.
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Hot down there in the hot house. The Morrison family make a beeline for the water once day finishes speaking.
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Reaction from interest groups is starting to flood in. I’ll pick up some of that in coming posts. And Mr Bowers has some wonderful pictures. I’ll post them shortly.
Quick summary before we push on
Brisk news night this budget. Just a very quick recap in the event you are just tuning in.
- After the two 7.30 interviews, it’s clear voters earning more than $80,000 will get their election tax cut. Labor is backing in the personal tax cuts – and there’s a hint they will offer more on that score by week’s end. Chris Bowen noted people below $80,000 got nothing, and I find it hard to imagine Labor going to an election offering a tax cut for high income earners but nothing for the low and middle income folks. Perhaps I’m wrong. It wouldn’t be the first time.
- But the government’s corporate tax agenda isn’t looking so crash hot. Labor says it will support tax cuts for small business provided they are actually small business. It won’t support a corporate tax cut for all companies. Labor is strictly anti-“glide path” on corporate tax.
#StopTheGlidePath
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Bowen won’t say tonight when Labor would return the budget surplus.
Q: What do you think is a reasonable target for spending as a percentage of GDP?
Chris Bowen:
Well, I don’t believe in setting artificial targets for spending.
Labor will keep the deficit levy
Bowen also confirms Labor will keep the deficit levy.
Chris Bowen:
We will make that the standing tax bracket because it was introduced to reduce the deficit. The deficit is now three times higher than it was when the government came in.
He’s less keen on the corporate tax cut. Bowen says by lifting the thresholds constantly, Morrison is redefining very large businesses as small businesses.
Chris Bowen:
Malcolm Turnbull and Scott Morrison want to take the definition of small business to being a business with a turnover of less than $1bn. It is laughable. It is an excuse to deliver a large business tax cut under the guise of making small business bigger and bigger.
Labor says it will support the bracket creep tax cut
Chris Bowen says Labor will support the tax cut for workers on over $80,000.
75% of Australians miss out on a tax cut under this budget.
Those who do get about $6 a week.
But we will support it. We will support the lift in the threshold from $80,000 to $87,000. Those people are working hard. They deserve the very modest relief they get. But we point out there are a whole lot of people under that threshold who get nothing.
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The shadow treasurer Chris Bowen has replaced the treasurer in the ABC studios.
Q: What’s Labor’s overall reaction to what we’ve heard today?
Chris Bowen:
This is a budget that develops a very dangerous trifecta, underfunds schools and hospitals but also sees the budget deficit blow out yet again. It has now tripled compared to this government’s first budget.
It is a budget which also delivers an uncosted and unfunded 10-year, large corporate tax cut plan, which is not affordable for the nation and which puts more pressure on the budget, which we will not be supporting.
Q: You have a bit of a hide, haven’t you, being a Labor Treasury spokesman to complain about deficits?
Chris Bowen:
Quite the contrary. This was a government elected on the mantra of fixing the budget deficit. Tonight’s budget makes it worse.
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Q: Let me bring in the Reserve Bank. They have cut interest rates today. Isn’t that evidence they don’t quite share your optimistic view of the health of the economy?
Scott Morrison:
No, I don’t think that’s the right way to read it. The Reserve Bank today were focusing on the inflation number. They have an inflation target of between 2 and 3%.
What the bank did today has been very much about inflation. The Reserve Bank governor was clear when he said the economy was transitioning well. In my discussions with him that has been reflected in that discussion.
Q: One final question before we let you go. We are about to go to an election. On the economic data, very little has changed over the three years of this Coalition government despite the promises you would tackle the budget emergency. Why should you be re-elected then?
Scott Morrison:
We have a national economic plan for jobs an growth to support jobs an growth from the mining investment boom to the more diversified economy. We set that out tonight with tax cuts for small business, a defence industry plan, backing innovation and science, including startups for new small businesses, ensuring the budget is May moving back towards balance and we can afford the investments in health, education, roads, dams, all these things necessary to take us forward.
Australians know the challenges are great but this is an economic plan up to that challenge and we’re ready to put it in place.
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Hmmm, as much as I’m into competition policy, oh no, I don’t think so.
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Sales pushes Morrison on the budget assumptions. They seem overly optimistic. Morrison says not.
She then asks where is the Turnbull government reforms that are the equivalent of Labor’s reforms in the 1980s and 1990s.
Morrison says the Harper review. That’s the equivalent of floating the dollar, Sales says, unconvinced?
Scott Morrison:
I think it is the equivalent and that’s what Professor Harper thinks as well.
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Q: Since the Abbott-Turnbull government was elected, you’ve mentioned this transition from the mining boom. What’s the point of – I ask – what’s the point of a Coalition government if you can’t stimulate business investment?
Scott Morrison:
That’s why we have the 10-year enterprise tax plan. Over the last 12 months we’ve seen strong household consumption, dwelling investment being a positive contribution to GDP.
We have had the net export sector making a contribution this year. The non-mining investment side of the equation is the thing we have to boost. That’s why you have an enterprise tax plan which reduces the tax burden, particularly on small- to medium-sized businesses, the ones we want to make that investment.
Q: But you’ve been in power for three years. Why haven’t we seen business investment pick up over that period of time?
Scott Morrison:
It is a difficult economy, Leigh.
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Q: Let’s take the size of the deficit. How is it that three three years ago the Coalition was outraged by Labor’s inability to get a surplus and yet unapologetically it’s deficits as far as the eye can see?
Scott Morrison:
We project to return the budget to surplus in 2021.
Leigh Sales opens strongly in this interview, asking what has been the point of the past three years.
Scott Morrison:
We’ve made enormous strides, in particular, 300,000 jobs were created last year. More than 50,000 young people were able to find employment. Youth unemployment is lower than it was at the last election.
We work to keep spending under control and we will receive the deficit reduced to $6bn as a share of the economy.
Q: You’ve been in power for three years. You say you’re reducing spending but when you’re looking at the percentage of spending against GDP it has gone up.
Scott Morrison:
When I took over this job we were heading to 26.2. In the budget it is 25.8. And as a result of the forward estimates it will be get to 25.2
In this budget we have not spent more than we’ve saved.
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I think I’ve fixed the lag now and we are back in real time. Hooray.
The treasurer is on his way to the ABC studios to be interviewed on 7.30.
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The speech also covered infrastructure and the schools and hospitals funding that’s already been announced.
Here is the section of the speech on the new work-for-the-dole scheme, another idea that seems worth pursuing.
Scott Morrison:
In 2012, 12% of Australian children aged under 15 were growing up in jobless families. We must do better than this. We must try new approaches, not just keep doing the same old thing. And we must keep trying until we get it right.
Tonight I announce an ambitious new attempt to get vulnerable young people into jobs called Youth Jobs PaTH – Prepare, Trial, Hire.
Australian businesses, especially small businesses, have told me they want to give young people a go, but we need to do more to get young people ready for a job, so businesses don’t carry all the risk and cost.
And it’s a two-way street. Young people have told me how they need people to get alongside them to help them to develop the confidence, skills, attitudes and behaviours that are expected by employers so they can get a job and stay in a job, because that is what they want.
This is what Youth Jobs PaTH is designed to do – it is not just another training program.
From 1 April 2017, young job seekers, who need to boost their job-readiness, will participate in intensive pre-employment skills training within five months of registering with jobactive.
The first three weeks of training will focus on skills such as working in a team, presentation, and appropriate IT literacy. A further three weeks of training will centre on advanced job preparation and job hunting skills.
In stage two, the government will introduce an internship programme with up to 120,000 placements over four years to help young jobseekers who have been in employment services for six months or more to gain valuable work experience within a real business.
Jobseekers and businesses, with the help of jobactive providers, will be able to work together to design an internship placement of four to 12 weeks’ duration, during which the jobseeker will work 15 to 25 hours per week.
In addition to gaining valuable hands-on experience in a workplace, jobseekers will receive $200 per fortnight on top of their regular income support payment while participating in the internship. This is real work for the dole.
Businesses that take on interns will receive an upfront payment of $1,000, and will also benefit from the opportunity to see what a young worker can do and how they fit in to the team before deciding whether to offer them ongoing employment.
In stage three, Australian employers will be eligible for a youth bonus wage subsidy of between $6,500 and $10,000, depending on the young person’s job readiness. These subsidies are just a smarter way of leveraging what you’d otherwise spend on Newstart and other welfare payments.
Businesses will have the flexibility to employ young job seekers either directly, through labour hire arrangements, or combined with an apprenticeship or traineeship.
In addition to these changes, existing wage subsidies including those for parents, Indigenous, mature age, and the long-term unemployed will be streamlined, making them easier for employers to access.
All of these initiatives will cost $751.7m over the next four years, and are fully funded from savings in other employment programmes, including better targeting work for the dole.
It is worth trying new ways to get young people into real jobs.
The cost of not doing so resigns thousands of young Australians to a lifetime of welfare dependency. In addition to the financial cost, the social and human cost is too great for our country to ignore.
That is why the Youth Jobs PaTH is such an important part of the Turnbull government’s economic plan for jobs and growth.
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There are some flexibilities in the super changes. Here is Morrison’s list.
- Allowing more employees and a wider range of self-employed people to claim a tax deduction for personal superannuation contributions;
- Encouraging partners to make contributions to their low-income spouses’ superannuation by extending the eligibility for individuals to claim a tax offset for these contributions;
- Removing the current regulations that restrict people aged between 65 and 75 from making contributions to their superannuation. This will assist those who are no longer working to top up their retirement savings from sources not necessarily available to them before retirement; and
- Allowing people to roll over unused concessional caps so those with interrupted work arrangements – predominantly women and carers – are not prevented from making catch-up contributions to their super, if they are in a position to do so.
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Labor laughs at the low income super stuff – this was a Labor measure the government wanted to scrap. But now an about face. A sensible about face, too.
Then to super.
For the top end.
Scott Morrison:
While protecting the overall architecture of our superannuation system, including retaining the tax-free status of retirement accounts, from 1 July 2017 we will be reducing access to generous superannuation tax concessions for the most wealthy by: introducing a transfer balance cap of $1.6m on amounts moving into the tax-free retirement phase, with balances able to increase above this cap, on account of tax-free earnings, once transferred; extending the 30% tax on concessional contributions to those earning over $250,000; reducing the annual cap on concessional superannuation contributions to $25,000; and from tonight, establishing a lifetime non-concessional contributions cap of $500,000.
A balance of $1.6m can support an income stream in retirement around four times the level of the single age pension. The transfer balance cap will be applied to both current retirees and to individuals yet to enter their retirement phase.
The transfer balance cap, lifetime non-concessional cap and the 30% contributions tax for those on high incomes will each affect less than one per cent of superannuation fund members.
A concessional contributions cap of $25,000 per annum will affect just 3% of superannuation fund members, particularly those who pay the top rate of income tax. Commensurate measures will also be applied to high-income earners with defined benefit arrangements, including current and former politicians and public servants.
Then the low-income folks.
In addition to tightening access to tax concessions, the government will also be introducing a low income superannuation tax offset from 1 July 2017, to ensure that people earning less than $37,000 are not paying more tax on their superannuation than they are on their income. This will effectively allow individuals with an adjusted taxable income of up to $37,000 to receive a refund into their superannuation account of the tax paid on their concessional contributions, up to a cap of $500.
The low income superannuation tax offset will, in particular, assist around 2 million low income women to build their superannuation savings.
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Then the multinational tax avoidance measures. Morrison says the government has been listening to the Australian people on this issue and taking action.
We need to do more, he says. The treasurer says new laws will be backed up by a new operational taskforce “of more than 1,000 specialist staff in the ATO to police and prosecute companies, multinationals and high wealth individuals not paying the tax they should”.
Scott Morrison:
This will be added to new measures to combat multinational tax avoidance which include: embracing a new diverted profits tax, as implemented in the United Kingdom, that taxes multinationals on income they have sought to shift offshore at a penalty rate of 40% that is higher than the current company tax rate; strengthening the protections for whistleblowers who come forward and report tax avoidance; and increasing penalties for multinationals that fail to meet their compliance and disclosure obligations to the ATO.
These measures will raise an additional $3.9bn in revenue over the next four years, helping us to reduce the tax burden on hard working Australians and small business.
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Then the speech goes to the business tax cuts which I took you through in the “at a glance” post.
Then the bracket creep tax cuts.
Scott Morrison:
From 1 July this year, we will increase the upper limit for the middle income tax bracket from $80,000 to $87,000 per year.
Those earning average wages – full-time or otherwise – should stay in the middle income tax bracket. This will stop around 500,000 taxpayers from facing the 37% second top marginal tax rate in each and every year.
This is about providing room in our tax system for average full-time wage earners to earn more without being taxed more.
Of course we would like to do more, but this is what we can afford today.
This change also builds on the tax cuts provided to those on incomes of less than $80,000 to compensate for the carbon tax. By abolishing the carbon tax and keeping the tax relief in our first budget we delivered a genuine tax cut for those earning up to $80,000 a year.
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Morrison tells the house the deficit in underlying cash balance terms is expected to reduce from $39.9bn in 2015-16 to $37.1bn, or 2.2% as a share of the economy in 2016-17. The deficit is then projected to fall to $6.0bn or just 0.3% of GDP over the next four years to 2019-20.
Scott Morrison:
We are achieving this by policies that continue to control spending. Any increases in tax revenue as a result of measures contained in the budget have been reinvested back into lower taxes, not towards fuelling unsustainable higher spending.
Our new spending commitments have been more than offset by our disciplined restraint and better targeting of spending in other areas. Payments as a share of our economy will fall from 25.8% in 2015-16 down to 25.2% in 2019-20.
At the same time there is no increase in the projected tax burden as a share of the economy, compared to the 2015-16 budget. This is not a time to be splashing money around or increasing the tax burden on our economy or hard-working Australians and their families. Such policies are not a plan for jobs and growth, they simply put our successful economic transition at risk.
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Bill, geddit?
On living within our means.
Scott Morrison:
In this budget we will continue to cut unnecessary waste and keep government spending under control to balance the budget over time.
We will continue to target welfare abuse to protect our social safety net and ensure it is there for Australia’s most vulnerable, in particular those with disabilities. And we will continue to responsibly invest in infrastructure like roads, rail, dams and public transport and guarantee real, affordable funding for health and education services that Australians rely on.
The Turnbull government understands the economic challenges that Australia faces. This budget is a practical, targeted and responsible economic plan that meets these challenges by clearing the way for jobs and growth, in a stronger, more diversified new economy. It is the right plan. We have spent time getting it right because it is such an important foundation for everything else.
It is also a fully funded, affordable and sustainable plan.
This is important because hard-working Australians and their families know that when governments make promises with money that’s not there, they either end up being let down or left with the bill.
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Morrison says the government has to fix problems in the tax system to sustainably fund services.
Scott Morrison:
This means combating tax avoidance, especially by multinationals, with new measures to ensure everyone pays the tax they should on what they earn in Australia, not avoid tax by shifting their profits offshore.
I will announce how we will close off generous superannuation tax concessions for Australia’s most wealthy and better target these tax concessions to hard working Australians saving and investing for their retirement so as not to be dependent on the age pension.
And we will give hard-working Australians, and the thousands of Australian businesses that employ them, some tax relief so when they earn more, they won’t be taxed more.
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The treasurer is working his way through the speech in the House of Representatives now. These transitions are always messy because I need to sprint up a floor and hook in before I’m properly live. Sorry, there’s no way to make it seamless.
Catching up now.
Scott Morrison:
Tonight I will announce a growth-friendly, 10-year enterprise tax plan to boost new investment, create and support jobs and increase real wages, starting with tax cuts and incentives for small and medium-sized enterprises.
We will continue our investment in our national innovation and science agenda – to create our own ideas boom, in every city, in every town, in every factory, farm, shop and office – including support for new startup businesses.
Through our 20-year defence industry plan, we will secure an advanced local defence manufacturing industry, driving new high-tech jobs in Australia, including 3,600 direct jobs as part of the government’s naval shipbuilding plan.
More export opportunities will be opened up by following through on our export trade agreements that are already delivering new jobs and markets for Australian producers, manufacturers and service providers right across the country.
And I will announce tonight a new initiative to help more than 100,000 vulnerable young people into jobs, to be part of our growing economy by giving them real work experience with real employers that lead to real jobs.
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Budget at a glance
Good evening, good people of Politics Live, I’m back with you once again, and the good news is I have your budget at a glance.
Here’s the information you need to know quickly.
If you earn over $37,000 but under $80,000 there’s really nothing for you. No goodies, no tax cuts, no special items. Let me say that again, nothing.
There’s a load of people in that category, the majority of the wage-earning public, in fact. Given it’s an election year, in crude political terms, I reckon that’s brave stuff in the Humphrey Appleby sense. In the budget lockup this afternoon the treasurer told journalists the public had “moved on” from binary concepts like winners and losers. I’m not sure if the public know they’ve moved on from that, but in any case, I must.
Move on, that is. Back to budget-at-a-glance.
If you earn $80,000-plus (that puts you in the top 25% of income earners), you get a tax cut. From July 1 the upper limit for the middle income tax bracket moves from $80,000 to $87,000. This, the government says, will stop half a million taxpayers moving into the second top marginal rate of tax. These folks also lose the deficit levy. Double plus good.
I note in passing this budget contained no cameos showing how people are better off in all the income brackets. That’s a budget standard, so strange Treasury forgot. Yes, that’s irony. Possibly no cameos because the cameos wouldn’t tell a great story – higher income earners do nicely enough, people in the middle get fat zip.
If you are a small business, you get a tax cut too. From 1 July, (a popular date, wonder why, yes that’s irony), the tax rate goes down to 27.5% and the relevant turnover threshold moves from $2m to $10m.
Each year bigger smaller businesses will be eligible for the tax cut on offer (I hope that makes sense) with the threshold lifting from $10m to $25m (2017-18) to $50m (2018-19) and $100m (2019-20.)
If you are a larger business, you get a tax cut as well, but you have to wait for quite a while. The corporate tax rate for all companies will be lowered to 25% in 2026-27.
But it’s not all a free lunch.
To try to neutralise the tricky politics of being seen to give business a tax cut at a time when there is widespread public perception that businesses don’t contribute their fair share, the behemoths get a whack. If you happen to be a multinational corporation, you will face new strictures, like a diverted profits tax. That measure, dubbed a Google tax, would apply a penalty rate of 40% to income shifted offshore, at least in theory.
Wealthy superannuants have their generous concessions wound back. That stuff is all pretty chunky, but I reckon, on balance, it’s good. Rather than work through it in detail in this first post I will link you to our news story on that in due course. I know a lot of people will be interested so I will do that. Scout’s honour. Stay tuned.
If you are a low income superannuant you get a low income superannuation tax offset from 1 July 2017 (which the government wanted to get rid of but it has come back in this budget). This measure benefits folks who earn up to $37,000.
If you are a young, unemployed person you get a revamped work-for-the-dole scheme involving training and internships that pay recipients $200 a fortnight on top of income support. Businesses also get wage subsidies to take on this cohort of job seekers.
Sticking with welfare, the bad news.
The government has grandfathered Labor’s carbon price compensation to existing recipients, which means new people going on to welfare and transfer payments will be getting lower benefits than people now receiving payments. To give you a couple of quick back-of-the-envelope examples: new pensioners would get between $5.90 and $14.10 less a fortnight. People on unemployment benefits would get between $7.90 and $14.10 less a fortnight.
Sticking with bad news, for smokers at least, tobacco excise is up in four increments of 12.5%, netting $4.7bn over four years. (Thanks Labor, that revenue was really super handy).
If you are public servant – watch out. There is a whacking efficiency dividend in this budget, delivering a saving of $1.4bn over the forward estimates.
For folks concerned about fiscal sustainability, the budget again tracks a slower path to surplus. A surplus doesn’t happen until 2021, which is outside the forward estimates. Budget emergency over. Fun times.
If you are interested in infrastructure you get dams. Loads of them, potentially. And various other transport projects, including early work on inland rail and the second Sydney airport transport links.
That’s enough to open the batting.
The treasurer is on his feet now giving his speech.
We’d better pick that up now for a bit before circling back to the details of budget 2016.
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Tick tock. It’s now 7.15pm, which is the time I set up the political context of this particular budget night. Politics consumers know that this week is all about handing in the homework before sprinting off to the polls for a double-dissolution election. Those atmospherics make this a highly unusual budget night.
Let’s be honest. There is no more governing happening in Canberra, there is only that highly strung waiting that tends to happen before someone fires the starter’s gun and everyone springs out of the blocks. That, and some supply bills making their way through the chambers.
If you are watching either of the news channels right now with Politics Live as your second screen I guarantee the various talking heads on the television are saying right now that tonight is a critical test for the new treasurer, Scott Morrison. They may well be saying the challenge the government throws down tonight with the contents of the budget will also present a critical test for Labor.
What I’ve just outlined is one of those things that pundits say to tap dance before the action starts, but it has the virtue of being true. Both the government and Labor will make big tactical calls over the coming days, and the reality is big tactical calls can make or break the leaders who make them. Consider Tony Abbott and Joe Hockey’s call in the 2014 budget. That big call broke both of them.
So it will be interesting to see how Morrison performs. He’s had a patchy run as treasurer thus far, he hasn’t exactly grabbed the job by the throat, so he’ll need to tell a convincing story tonight to set up the government for the most gruelling campaign since the mid-1980s.
Then the decisions for Labor: what material to bank, what material to use for product differentiation, what original material to bowl up when Bill Shorten’s budget-in-reply moment arrives on Thursday night.
My next post will be live, and I’ll be bringing you the 2016 budget at a glance. Stay tuned. Not long now.
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Good evening lovely people and welcome to our live coverage of budget night. Right now I’m still in lockdown in the lockup, but through the magic of the interwebs (and the lovely Helen Davidson) I’m also speaking to you in order to set the scene for this evening.
Let’s start with the obvious: a sonic boom will happen at 7.30pm when we emerge from our briefings. The treasurer will make his budget speech, then he will roll into a series of interviews, and then the non-government parties and various interest groups will react to the contents of the annual economic statement in quick succession over the next several hours.
Just a pro life tip. It’s wise to have a glass of wine in your hand once the firehose gets turned on. Trust me, if I could have a glass of wine in my hand at that moment I would, but that would prevent me faithfully serving your need to know, which is of course the need I’m here to serve for the remainder of the evening. Get that wine now, or grab your wine equivalent. A scented candle is fine. Stuffed animal. Do it while there is still time. Trust me.
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