Treasurer Scott Morrison has said this year’s Federal Budget is all about a strong economy, more jobs and essential services as the government lives “within its means”.
That’s all very well, but you’re probably wondering what it actually means for you. Let’s take a look at the main points from the 2018 Budget so you can see how you might be impacted.
Preschool and childcare
A new package coming into effect on July 2 will give a million or so Aussie families a boost with their childcare costs. From this date there will be no more limits on the Child Care Subsidy for families with a combined income of $187,000 or less.
The Child Care Safety Net will remain in place to support children with special needs and those from disadvantaged backgrounds and regional or rural areas. For all families, the Child Care Subsidy withholding rate will be cut to 5%, making more money available each month.
The government claims it is funding public hospitals at “record levels” in this year’s Budget. This includes over $30 billion of extra funding to be provided between 2020-21 and 2024-25. Meanwhile, the Medicare Guarantee Fund will get a $34.4 billion lift and the government is introducing a new program aimed at encouraging more doctors to move to regional areas.
Schools have done well from this year’s Federal Budget with an extra $24.5 billion of needs-based funding being delivered over the next decade. This is around 50% more per student than schools currently receive on average.
The government is also lending its support to curriculum reforms and new online learning tools proposed by businessman David Gonski. Permanent funding has been pledged to the National Schools Chaplaincy program, beginning with an additional $247 million over four years, the initial focus being on anti-bullying.
If you’ve been hoping for a tax cut, the good news is you only have to wait until July 1. Tax cuts for low- and middle-income earners mean people earning up to $37,000 per year will get relief of up to $200, while for those earning up to $90,000 it’s a maximum of $530. It may not be much, but it’s better than nothing!
The government is also proposing changes to income tax thresholds which will level out the tax system over the next seven years. The end result will be that a maximum marginal tax rate of 32.5 cents per dollar will apply to 94% of Aussies.
Traffic and transport
The government is planning to inject a lot of funding into road and rail infrastructure – this will ease traffic and make public transport a viable option for more people. Across Australia, a $1 billion Urban Congestion Fund will help improve traffic flow via various state-level projects.
If you’re sick of daily traffic woes, keep an eye out for these big projects in the pipeline:
Victoria is going to do pretty well from the government’s spending on traffic alleviation and public transport improvements. Funding outlined in the Budget includes:
- $5 billion for a Melbourne Airport rail link
- $1.75 billion for the North East Link
- $475 million for a rail link to Monash University’s Clayton campus
- $225 million for the Frankston line to Baxter to be electrified
- $132 million to duplicate the Princes Highway between Traralgon and Sale
The Federal Budget is also supporting several projects in NSW, including:
- $400 million to get up to 900 trucks a day off the roads by duplicating the Port Botany freight rail line
- $971 million for the Coffs Harbour bypass, allowing drivers to avoid 12 sets of traffic lights along that route
- Around half of the money needed for the $310 million four-lane bridge being constructed over the Shoalhaven River at Nowra (the rest will have to come from the NSW government)
Western Australia is due to benefit from:
- $1.05 billion for the Perth Metronet rail project
- $944 million for traffic easing measures in Perth
- $220 million for the Great Northern Highway Bindoon bypass
In Queensland, the focus is on decongesting the M1 Pacific Motorway and the Bruce Highway – a billion dollars has been pledged towards works on these busy highways. In addition, $390 million is going towards a duplicate north coast rail line which will offer new passenger services and reduce the number of trucks on the Bruce Highway.
The Gawler rail electrification project in South Australia will receive funding of $220 million with an extra $160 million pledged to improve the national freight network by duplicating Port Augusta’s Joy Baluch Bridge.
In Tasmania, Hobart’s Bridgewater Bridge is being replaced in a $461-million project which will reduce travel time into the city and lower freight costs.
New and expecting parents
$17.5 million is being invested into researching the first 2000 days of babies’ lives and improving the health of mothers. An additional $3 million will help educate pregnant women about exercise and healthy eating.
The Boostrix and Adacel combination vaccines have been added to the National Immunisation Program, and pregnant women will be able to receive free vaccines against pertussis. Digital baby books will soon be introduced for every newborn, acting as an electronic health record for the rest of their lives.
To fight against age discrimination, employers will receive a $10,000 wage subsidy for hiring older Australians.
Your medicines may soon get cheaper as a result of $5 million being spent to encourage the use of generic drugs. The Pharmaceutical Benefit Scheme will get an extra $1.4 billion in funding, with medicines for spinal muscular atrophy, breast cancer, refractory multiple myeloma, relapsing-remitting multiple sclerosis and HIV prevention being added to the program.
The Royal Flying Doctor Service, which provides dental, mental health and emergency services to Aussies in rural areas, will receive $84 million in funding. But to help us stay healthy in the first place, the government is putting $154.3 million towards community sport and other measures to encourage healthier lifestyles.
All pensioners – including full-rate pensioners and self-funded retirees – will soon benefit from the Pension Loans Scheme. This means an income boost of up to $17,800 per couple while the pension and other retirement benefits remain in place.
An extension to the Pension Work Bonus will allow pensioners to earn an extra $1,300 each year without a reduction to their pension payments. It is also being expanded to include self-employed Aussies, who will have an earnings threshold of $7,800 a year.
People with disabilities
There isn’t much to report when it comes to disability funding, except that the government has confirmed funding previously pledged to the National Disability Insurance Scheme. 140,000 Aussies currently access this scheme, which should be rolled out completely by 2020. $92.1 million of extra funding will support people who are in a period of transition towards the NDIS, while $64.3 million is going into a jobs fund to scale up the number of NDIS workers.
The government is cracking down on “phoenix” activity (where shady business operators purposefully go bust to write off their bills, but later re-emerge from the ashes with another scheme). Customers, other businesses and employees are all at risk of losing out from this kind of operation, so any measures to hold people accountable for their actions are welcome. The government’s proposed changes will close loopholes which allow directors to dodge responsibility by resigning, plus they will give the ATO more power to retain refunds.
If you like doing things the old-fashioned way and would rather make large payments in cash, you might soon be disappointed. As of July 1, 2019, the government is banning cash transactions over $10,000. The aim is to stop tax evasion and money laundering, so you’ll have to make your legitimate payments by cheque or electronic transfer instead.
The $20,000 instant asset tax write-off will stay in place for another year until June 30, 2019. Employees will receive additional protection through expanded unfair contract terms protections, while more small businesses will have access to “free, fast and binding dispute resolution” through the new Australian Financial Complaints Authority.
$293.6 million will go towards aviation security as the government moves to protect Australia against “evolving threats” in civil aviation. $50.1 million of this will be put towards enhancing airport security with better screening technology at 64 regional airports. The government is also spending $121.6 million on improved screening of air cargo and international mail.
A further $62.2 million has been pledged to combat people smuggling, with $130 million more going towards identifying cyber crime and terrorism threats through visa screening.
Craft beer is about to get cheaper, with smaller breweries benefiting from a tax cut that will bring them level with the bigger names.
The Great Barrier Reef will get funding of over half a billion dollars. This will help with improving water quality, conducting further scientific research, and combating coral destruction by the crown-of-thorns starfish.
If you want to know more about the details of the 2018 Federal Budget, visit https://www.budget.gov.au