More than 10 million Australian workers are set to receive up to $1,080 in tax cuts as part of an election-focused Budget with plenty of winners and just a few losers.
As the government prepares to face the voters, Treasurer Josh Frydenberg announced a massive $158 billion worth of tax relief that will put money in the pockets of low and middle-income earners.
Along with tax cuts, the Budget included a raft of sweeteners, including $30,000 in tax write-offs for tradies and small business owners and cash handouts of $125 to help battlers pay their power bills.
It also included $8,000 subsidies for bosses hiring apprentices, $2,000 in cash for apprentices and $100billion for fast trains and new roads.
The Budget forecasts a $4.2billion deficit this year ahead of a $7.2billion surplus in 2019-20.
Mr Frydenberg, delivering his first and possibly last Budget as Treasurer, hailed the first foretasted surplus in 12 years as a sign the nation was ‘back in the black and Australia is back on track’.
More than 10 million Australian workers are set to receive up to $1,080 in tax cuts as part of an election-focused Budget
Treasurer Josh Frydenberg (pictured with son Blake) hailed the doubling of tax relief from last year as the biggest win for taxpayers in more than a decade
Low and middle-income earners were the big beneficiaries, and are set to receive windfall tax cuts of between $255 and $1,080 a year from July 1.
The benefits will flow to those 10 million Australians earning $18,200 to $126,000 a year.
‘Taxpayers earning up to $126,000 a year – including teachers, tradies and nurses – will receive a tax cut,’ Mr Frydenberg told Parliament House in Canberra on Tuesday night.
The Coalition government is hoping its Budget spending spree will boost its chances at the May election, which Prime Minister Scott Morrison is tipped to call within days, with Labor now winning 50 Newspolls in a row.
Mr Frydenberg was nearly upstaged on his big day by an animated former deputy Liberal leader and foreign minister Julie Bishop, who dazzled in a $1,300 blue sequined Rachel Gilbert gown.
She waved her arms in the air and sported a big smile of glee, a decade after she was demoted as the Coalition’s shadow treasurer for failing to name Australia’s official interest rate in an ABC radio interview.
Mr Frydenberg was nearly upstaged on his big day by an animated former deputy Liberal leader and foreign minister Julie Bishop (pictured), who dazzled in a $1,300 blue sequined gown
The government also announced Centrelink recipients would have their employment incomes automatically reported, in a measure designed to save $2.1 billion over five years.
From July 1, people who receive Centrelink payments and are also employed will automatically input their fortnightly income, rather than calculating and reporting their earnings.
Government officials expect the measure will ‘greatly reduce’ the likelihood of welfare recipients being overpaid, and subsequently being chased for the money.
While there were plenty of winners, there were a few losers with first-home buyers and university students getting little special treatment.
Criminals had the most to lose, with the government announcing child sex offenders would be named and pictured on a ‘publicly available’ register.
Bikies also have more to fear with $150 million dedicated towards law enforcement efforts to ‘combat outlaw motorcycle gangs’.
Mr Frydenberg (pictured with wife Amie), delivering his first and possibly last Budget as Treasurer, hailed the first surplus in 12 years as a sign the nation was ‘back in the black and Australia is back on track’
Foreign agents seeking to interfere with elections are also in the government’s sights with the Australian Security and Intelligence Organisation receiving $35 million to ‘counter activities that seek to undermine Australia’s sovereign democratic institutions’.
ASIO and the Australian Federal Police are also receiving $570 million to counter terrorism and extremism.
With an election on the government’s radar, the Budget was clearly focused on hip pocket issues.
Australians earning between the tax-free threshold of $18,200 and $126,000 a year will receive up to $1,080 in annual tax cuts, or $20.80 a week.
The Coalition government is hoping its Budget spending spree will boost its chances at the May election, which Prime Minister Scott Morrison (right) is tipped to call within days, with Labor now winning 50 Newspolls in a row
The biggest winners will be the 4.5 million people earning $48,000 to $90,000 a year, who will get the full benefit of the tax cuts.
This includes Australians earning an average full-time salary of $83,500 a year and those in the very middle, who are on a median annual income of $55,400.
Part-time, low income earners, taking home $18,200 to $37,000 will receive a smaller tax cut of $255 a year, or $4.90 a week.
All up, 10.1 million workers will be receiving tax cuts, with 7.8 million of them set to receive more than $1,000 a year in relief, including those on the minimum full-time wage of $37,400 a year.
This more than doubles the $530 in tax cuts last year allocated for those earning $48,000 to $90,000, following some stronger-than-expected government royalties from higher iron ore prices.
Mr Frydenberg hailed the $158 billion in tax relief for the 2019-20 financial year as the ‘largest personal income tax cuts since the Howard government’.
Prime Minister Scott Morrison (pictured with wife Jenny) is going to the election with a plan to give tax cuts to Australians earning up to $126,000 a year
How much money taxpayers take home depends on their wage.
– Taxpayers who earn between $1 and $37,000 will get a tax break of up to $255. Some 2.3 million taxpayers will get this amount.
– Taxpayers who earn between $37,001 and $47,999 will get a tax break of between $255 and $1,080. Some 1.7 million taxpayers will get this amount.
– Taxpayers who earn between $48,000 and $90,000 will get the full tax break of $1,080. 4.5 million taxpayers will get this amount. Couples would take home a maximum $2,160 a year.
– Taxpayers who earn between $90,001 and $126,000 will get tax break starting at $1,080, with the number falling as salaries get bigger. 1.6 million taxpayers are in this bracket.
– Taxpayers who earn $126,001 or more will get a $135 tax break
The money will be available when Australians submit their tax returns for the financial year from July 1 onwards. The tax break will be available for four years.
The Treasurer (pictured with son Blake) also announced the first Budget surplus since 2007, when Peter Costello delivered his last Budget before the Coalition lost the election to Labor’s Kevin Rudd
BATTLE LINES: Scott Morrison is expected to call an election in the coming days – after offering millions of voters tax cuts of up to $1,080
The Treasurer also announced the first Budget surplus since 2007, when Peter Costello delivered his last Budget before former prime minister John Howard lost the election to Labor’s Kevin Rudd.
‘The budget is back in the black and Australia is back on track,’ Mr Frydenberg told Parliament.
The 47-year-old Treasurer said his first budget, with a $7.1 billion surplus, was the result of ‘responsible budget management’.
‘It restores our nation’s finances without increasing taxes,’ he said.
Mr Frydenberg hailed his financial plan as one designed to make life easier for ‘average families’ on a median household income of $74,800 a year.
‘Their cost of living pressures will be eased… there will be more money in their pocket,’ said Mr Frydenberg.
The Treasurer wants to cut taxes even more by changing the tax brackets between now and 2024-25. It would result in 13.3 million people paying lower taxes – but it’s two elections away.
Australians earning between $18,200 and $126,000 a year will receive up to $1,080 in annual tax cuts, or $20.80 a week (pictured are Treasurer Josh Frydenberg’s children Amie with their children Blake and Gemma)
If those plans did go ahead, by 2024-25, people earning up to $45,000 would pay 19 per cent tax; people earning between $45,001 and $200,000 would pay 30 per cent tax; and people earning over $200,000 would pay 45 per cent tax.
‘We want Australians to earn more and keep what they earn,’ Mr Frydenberg said on Tuesday night. He repeated eight times in his speech that the Coalition won’t raise taxes.
Labor leader Bill Shorten has already branded the budget a ‘political leaflet’. The Opposition says the budget will essentially be redundant if Labor wins the election.
His shadow treasurer Chris Bowen has vowed to will match the Coalition’s tax cuts for low and middle income earners, but argues the federal budget has no plan to lift wages.
‘This is essentially a copy of what we proposed last year, and they are simply catching up to us,’ he said in a statement on Tuesday night.
‘But the Liberals are so out of touch that they’ve given a much smaller tax cut to two million Australians earning less than $40,000. Labor will fix this and give these working people the tax relief they deserve.’
Mr Morrison expected to visit Governor-General Sir Peter Cosgrove over the next fortnight to call a May election and Tuesday’s budget draws the battle lines.
If you’re struggling with high electricity bills…
More than 3.9 million welfare recipients will receive a cash handout to ease the cost of high electricity prices.
Singles will be paid $75 and couples $125 under the so-called energy assistance payment.
Mr Frydenberg says the government will pay out the $285 million rebate by July.
It looks likely to pass Parliament, with Mr Shorten ridiculing the rebate as a ‘con … worth about $1.45 a week’, but saying he will support the measure.
Age and disability support pensioners, single parenting payment recipients, carers, former servicemen and women and their dependents will be eligible.
Self-funded retirees who don’t receive a part-pension will miss out.
The unemployed also won’t get a cent.
On Monday night, former assistant treasurer Arthur Sinodinos called for the Newstart benefit to be increased from the present rate of $556 a fortnight.
‘We have reached the stage where we have to look more fundamentally at what we do about Newstart, because it’s been allowed to decrease relative to wages for so long now,’ Senator Sinodinos told the ABC’s Q&A program.
Single mothers who receive the parenting payment will be eligible for the energy payment
If you are a young person…
Apprentices are the biggest winners and live music got a surprise boost – but young people looking for action on housing affordability or for help with university will be disappointed.
The biggest budget item for young people is a $525 million skills package, which creates 80,000 new apprenticeships in industries with skills shortages and give apprentices a $2,000 ‘incentive’ payment.
Aspiring bakers and bricklayers will receive half of this money after 12 months, and the other half when they finish their apprenticeship.
Employers will have more reason to hire apprentices. They will be paid $8,000 for every placement, double the current incentive.
Struggling areas with high youth unemployment will get ten trial ‘vocational training hubs’ at local schools.
The live music industry will get a $30 million boost. Most of it will comes in the form of grants to support live music venues.
Youth mental health services have won millions – including extended early psychosis services, $265 million for headspace clinics, and $6.1 million for a trauma recovery centre.
The government has plunged a further $2 billion into an effort to fight climate change, which would affect future generations.
There’s nothing for first home buyers and only a few references to university students. Teachers who ply their trade in very remote areas for four years will have their uni debts extinguished.
The government is also funding new scholarship placements for indigenous students and is trying to improve the number of Aboriginal children finishing high school.
If you are a woman…
After the hideous killings of too many women – including the murder of Melbourne comedian Eurydice Dixon – the government has boosted domestic and family violence funding.
$328 million has been poured into stopping domestic and family violence, including a plan to close loopholes that stop state agencies from hearing about violent incidents heard by the Family Court.
The budget includes big efforts to help breast cancer patients, including MRI screenings funded by Medicare and money for the McGrath foundation to supply 41 breast cancer nurses.
There’s a $150 million effort to build new female change rooms at sporting grounds and swimming facilities across the country.
The government will build an AFLW (AFL Women’s league) facility in Queensland and redevelop a current facility in Victoria, Carlton’s Ikon Park.
Some $675,000 will be handed to a program to women to join the male-dominated construction industry.
If you run a small business…
Companies that turn over less than $10 million will get a bigger tax deduction when they buy work gear.
The instant asset write-off has been boosted to $30,000 – up from $20,000 – meaning businesses will be able to deduct more office gear, tools and vehicles.
Pick your tools up… small business people who turn over less than $10 million will be able to write off tools, office equipment and other items on tax up to the value of $25,000
The deduction starts from tonight and will last until June 30, 2020, with the government claiming businesses will be able to use the money to hire more workers.
The government has passed tax cuts for small and medium sized companies (SMEs) and promises to slash taxes further if it’s re-elected.
If you drive, fly or catch the train…
More has been plunged into a mammoth effort to make Australians’ commutes easier and to fix troubled roads.
Infrastructure funding will jump $25 billion to $100 billion over the next 10 years in a bid to connect Australia’s job-creating cities with regional population centres.
High speed rail is on the agenda with the Treasurer saying a ‘fast-rail vision for Australia’ is at the centre of its plan.
The government has put $40 million towards investigating five fast rail corridors: from Sydney to Parkes via Bathurst and Orange; Brisbane to the Sunshine Coast and Gold Coast and Melbourne from Traralgon to Albury-Wodonga. A National Faster Rail Agency will also open its doors.
$2 billion has been committed to a ‘bullet train’ between Geelong and Melbourne, provided the state government stumps up the same amount. The train will travel at 160km/h, the fastest in the nation.
$75 billion has been plunged into infrastructure projects across the country over ten years. Westconnex construction works in Sydney are seen above
Other headline-grabbing projects in the budget include:
- $2.2 billion to make roads safer, including improving bush highways, fixing black spots and a road safety office
- Funds to develop business cases for trains from Melbourne to Tullamarine Airport, and connecting a rail link to Sydney’s forthcoming second airport
- $253 million for ‘congestion-busting’ projects in Sydney and the NSW Central Coast, $194 million for Adelaide, $730 million for North Queensland roads
- An extra $1.6 billion for West Australian roads and railway projects
- $1 billion to improve freight networks, including road upgrades along the east coast of Australia
If you’re thinking about retiring…
Superannuation rules have been tweaked especially for semi-retired people who work one day a week or volunteer.
People age 65 and 66 will be able to make voluntary super contributions without having to work a minimum of 40 hours a month from July 1, 2020.
Th eage limit for spouses to contribute to their partner’s super will also jump from 69 to 74.
The government has tweaked superannuation rules for so people aged 65 and 66 have ‘more flexibility’ (stock image)
People over 70 currently can’t receive contributions made by another person on their behalf.
Elderly people who want to stay at home for longer will have more support after the government funded a further 10,000 places.
If you’re ill…
X-rays and ultrasounsd may get cheaper with the government investing $200 million to index Medicare rebates for life-saving scans.
Breast cancer MRI scans will be covered by Medicare.
Some medicines will be substantially cheaper, as will life-saving diagnostic scans
Two new drugs have been added to the Pharmaceutical Benefits Scheme (PBS) for treatment of an aggressive skin cancer and an advanced breast cancer.
Bavencio, used to treat the rare skin cancer metastatic merkel cell carcinoma, and Ibrance, which slows the growth of breast cancers, have both been listed.
The PBS subsidy slashes the cost of Bavencio from $150,000 a year and Ibrance from $55,000 a year to about $40.30 per script.
If you’re sick of the banks behaving badly…
The big regulators that police the banks will get a half-a-billion dollar top up, after a royal commission found them asleep on the job.
Former High Court judge Hayne denounced ASIC (the Australian Securities and Investment Commission) and APRA (the Australian Prudential Regulation Authority) for failing to take the banks to court.
‘Much more often than not, when misconduct was revealed, little happened beyond apology,’ Mr Hayne’s said in his scathing report.
ASIC’s budget will balloon by 25 per cent, or $400 million, and APRA’s bottom line was boosted $150 million, in the hope the financial cops will be ‘better able to stamp out misconduct’, Mr Frydenberg announced.
If you enjoy watching the ABC and SBS…
You can still tune in.
The government has guaranteed $4 billion over three years to both public broadcasters, including tens of millions for local news and current affairs, which bosses were worried would be cut.
If you are a drug user…
The scourge of the drug ice will be fought with a $340 million National Drug Strategy, with a huge chunk of that going toward police efforts to fight bikies.
If you’re patriotic…
Mr Morrison said he wants to honour Captain James Cook’s journey to Australia 250 years ago because he gets a ‘bit of a bad show’.
His government has offered $12 million to support the Cooktown 2020 festival and fund a replica of Captain Cook’s ship, Endeavour, to circumnavigate Australia.
The Opposition scolded the PM for his ‘Captain Cook fetish’ when he made the announcement the week before Australia Day.
But Mr Morrison said he wants ‘to help Australians better understand Captain Cook’s historic voyage and its legacy for exploration, science and reconciliation.
‘That voyage is the reason Australia is what it is today and it’s important we take the opportunity to reflect on it.’
If you’re worried about drugs …
The Budget has set aside $188 million over five years to crack down on illegal drugs.
Addicts will benefit from a $10 million drug rehabilitation program.
SOME OTHER ITEMS IN AUSTRALIA’S 2019 BUDGET
Pledges in the Coalition’s Budget include:
* Tax office and other agencies to crack down on welfare cheats and tax dodging
* City deals for Adelaide, Hobart, Townsville, Launceston, Western Sydney, Darwin, Geelong, South East Queensland and Perth
* $100 million for regional airports
* Programs and policies bundled under a Long-Term National Health Plan
* $220 million from Medical Research Future Fund for research into heart disease
* $496 million for Victorian cancer research, services and facilities
* $62 million plan over four years for GP, emergency care and specialist services in rural areas.
* $20 million for a new program to support people living with epilepsy.
Mr Frydenberg and finance minister Mathias Cormann parade this year’s budget papers in front of media on Tuesday morning
* $570 million boost for national security agencies
* $294 million to upgrade security at airports in a bid to prevent terrorist attacks
* Australian Space Agency to be funded
* $2 billion for Emissions Reduction Fund, now called the Climate Solutions Fund
* $1.4 billion for Snowy Hydro 2.0
* $56 million for Battery of the Nation and Marinus Link projects in Tasmania
* $10 million business case for energy projects in north and central Queensland, alongside a shortlist of 12 further power projects which could be underwritten.
* $60 million for James Cook University’s Cairns Tropical Enterprise Centre
* $60 million indigenous education hub in Melbourne
* $78 million to provide more housing for women and children fleeing family violence
* $129 million to extend cashless welfare card to all of Northern Territory, and to Cape York communities in Queensland
* National Disability Insurance Scheme fully-funded, but an underspend over the financial year of $1.6 billion. The underspend was due to be about $5 billion but is expected to be reduced by the government increasing payments.
* $22.5 million towards establishing the National Centre for the Prevention of Child Sexual Abuse
* $28 million to improve weather monitoring, especially in flood-prone areas
* $9 million extra (total package $20m) to deal with yellow crazy ants in north Queensland.
* $550 million for housing in remote Northern Territory communities, through the reversal of a federal funding freeze.
* $150 million funding package for women’s sport
* $15 million towards the construction of the North Queensland Cowboys’ $45m new training facility in Townsville’s CBD
Source: Australian Associated Press