Federal Budget Overview: This year’s federal budget focusses on careful infrastructure spending, delivering economic growth, protecting essential services for Australians and tackling cost of living pressures whilst ensuring the Government lives within its means.
The Government has prepared this budget with not just the economy, but also the voters in mind. The budget covers most areas that have been a topic for discussion in the media.
With a more positive economic outlook, infrastructure project spending takes a front seat in this budget, with new projects announced as follows:
Western Sydney Airport
The Government is providing up to $5.3 billion establishing WSA Co to develop Western Sydney Airport. Works will commence by late 2018 and airport operations by 2026, creating 20,000 jobs.
New road and rail investments
The Government is establishing a $10 billion National Rail Program to fund regional and urban rail investments.
Melbourne to Brisbane Inland Rail: Commencing in 2017-18, the Inland Rail project will invest $8.4 billion to construct a rail line from Melbourne to Brisbane to grow the region’s capacity for freight transport which will remove some of the burden off our congested road network.
The Government is also providing $500 million for Victorian regional passenger rail, including $100 million for a Geelong Rail Line Upgrade. A further $20.2 million is also being provided for Murray Basin Rail and $30 million to help plan a Tullamarine airport rail link.
In Queensland, the Government is providing $844 million for new Bruce Highway priority projects, including for a Pine River to Caloundra upgrade.
In Western Australia, the Government is providing $1.6 billion towards a $2.3 billion road and rail infrastructure package with the Western Australian Government. The package includes a combined $1.2 billion towards the METRONET rail project and $100 million for better road access to the Fiona Stanley Hospital precinct.
Snowy Power Scheme and Boosting Energy Supply
Investment in new power generation transmission and storage by expansion of the snowy mountain hydro electric scheme, protection of local gas resources for domestic use, an enquiry into the pricing of electricity and gas markets, and investment in clean energy to support new technologies.
Investing in Regional Australia
Building growth in our regions remains a key focus of the Government, with infrastructure projects, a new regional growth fund and Investment Corporation and boosting job creation in the regions.
Regional Growth Fund will invest $472 million in regional infrastructure projects, the Regional Investment Corporation will provide $28.5 million to provide concessional loans for water infrastructure and farm businesses. The Rural and Regional Enterprise Scholarships will provide $9.1 million to provide better access to mental health services and the Government is exploring opportunities to decentralise commonwealth agencies to broaden the range of skills and job opportunities in regional Australia.
Medical and Health Investment
A new Medicare Guarantee Fund will secure ongoing funding of the Medicare Benefits Schedule and Pharmaceutical Benefits Scheme. An increase in the GP payments and incentives, some specialist consultations will also be indexed, and the bulk billing for pathology and diagnostic imaging services will continue. Public Hospitals will receive an additional $2.8 billion in funding, and increases to mental health and medical research spending was also announced.
The NDIS will be fully funded, largely due to an increase in the Medicare Levy increasing to 2.5% from 1 July 2018.
Childcare, School and University Funding
There are changes to the way childcare funding is structured, moving to a needs-based model and providing additional funding for preschools and before and after school care placements.
School funding is also increasing by $18.6 billion and also moving to a needs-based model to make the funding fairer for all students irrespective of where they live.
University costs will increase with a degree increasing on average $7.4% over the next 4 years, and the repaying of HELP debt will now start when incomes reach $42,000.
Defence, Police and Border Protection
Defence spending is being increased to protect Australia from terror related attacks, and increases in funding to the Australian Federal Police will see new anti-terrorist taskforces and increases in border protection capabilities. Citizenship requirements will also be strengthened with a renewed focus on Australian values, higher English Language capacity and a more meaningful citizenship test.
Housing Affordability is addressed through releasing more commonwealth land supply in key areas, creating incentives to develop affordable housing, capping the foreign investment ownership on new developments to 50% and taxing those who keep their properties vacant, and helping first home buyers to save for their deposits through changes to superannuation. Older Australians downsizing will be able to contribute $300k from the sale of their home into superannuation.
Making Things Fairer
A range of changes was announced including changes to the banking system to lower risk and provide a more competitive industry. Tax changes to ensure businesses and individuals pay their fair share of tax were announced, with a focus on multinational tax avoidance, GST and small business CGT concession abuse, residential property tax, capital gains for foreign investors, and cracking down on financial and organised crime.
A range of changes to welfare recipients was announced, helping those who want to work get into the workforce, and stronger penalties for deliberate non compliance, drug testing in some areas and extending the cashless debit card program.
All these measures are set to see a budget surplus return in the 2021 financial year providing the economic growth continues along current trends.