Wednesday, 10 May 2017

The Morning After: a brief look at Turnbull Government's Budget 2017-18

ABC News, 9 May 2017:
* Most taxpayers will soon be paying more tax. The Medicare Levy is set to increase by 0.5 percentage points — from 2 to 2.5 per cent of taxable income — to help fund the $22 billion National Disability Insurance Scheme (NDIS) and avoid future budget black holes.
If it's passed by Parliament, the change will kick in on July 1, 2019.
* Welfare payments are being consolidated and some new welfare recipients will be subject to random drug testing. People deemed to be at risk of substance abuse will be required to undertake random saliva, urine or hair follicle tests for drugs in three locations from next year. Jobseekers who test positive to drugs will have their payments quarantined. About 450 people each year will be blocked from claiming the Disability Support Pension on the basis of drug and alcohol abuse alone.
Newstart and Sickness Allowance recipients will be moved to the new JobSeeker Payment, which pays the same. Jobseekers aged up to 49 will now have to undertake 50 hours of approved activity a fortnight. There will also be longer waiting periods for those with liquid assets.
The Cashless debit card will be introduced in two new locations.
* Older people on welfare will lose out — the over-60s will now have to complete 10 hours of approved activity a fortnight, which can include volunteering.

* Superannuants, as the major shareholders in banks, could bear the brunt of the new levy faced by the five biggest financial institutions. Economists say any reduction in the banks' profits will ultimately impact the share price and therefore the banks' shareholders.

* University fees are on the rise. Students will have to pay an extra $2,000 to $3,600 for a four-year course. That's a fee increase of 1.8 per cent next year, and 7.5 per cent by 2022.
The income level at which you will have to start repaying your HECS debt will also be reduced. Currently, you only have to repay your debt when you earn over $55,000. From July next year, you'll have to repay it once you hit $42,000.
Universities are also facing a 2.5 per cent efficiency dividend. The only win for university students is the introduction of Commonwealth Supported Places in sub-bachelor programs like diplomas.
* People who use roll-your-own tobacco or smoke cigars might feel some pain after the budget. Those products are set to be taxed more, bringing them into line with the tax rates on cigarettes.
In addition, elsewhere the mainstream media reports:
* Negative gearing remains, a measure which allows investors such a large share of the housing market and which drives up housing costs. As lip service to community anger it will now disallow deductions for travel expenses related to inspecting, maintaining or collecting rent for residential rental property.
* Universities face a funding cut of est. $2.5 billion due to efficiency dividends.
* The national affordable housing agreement that provides $1.3 billion a year to the states and territories will be replaced with a new set of agreements, with no additional funding. These new agreements require states to deliver on housing supply targets and reform their planning systems. In particular the Turnbull Government will push to have planning regulations eased in 8 Western Sydney local government areas.

* The Turnbull Government will spend $374.2 million over the next two years creating an electronic health record by default for every Australian citizen. Enabling legislation has already been introduced into parliament.

* Cashless debit card trials in SA & WA will be extended until June 2018.

* 5,000 Jobseeker applicants will be identified for inclusion in the two-year drug testing trial by a data-driven profiling tool which identifies ‘relevant’ characteristics which indicate risk of substance abuse. These Jobseekers will also be subject to random Dept. Human Services appointments administered by a third-party contract supplier.

* Widow Allowance, Bereavement Allowance, Sickness Allowance and the Wife Pension will end in March 2020 and recipients moved onto Jobseeker allowance.

* People claiming welfare will have provide their tax file number to Centrelink on request to make it easier to access their income information.

* All information held by Dept. of Human Services will be allowed to be used in criminal proceedings as part of welfare fraud prosecution of an individual.

* Families on family tax benefit will lose 30 cents of their benefit for every dollar they earn over $94,316 from July 2018 due to an income taper test. This is likely to affect 100,000 families.

* $170m has been allocated to hold the divisive same sex marriage plebiscite in the face of the electorate’s clear preference for the matter to be decided by parliamentary vote.

* $4.68 million over five years will be cut from funding of onshore asylum seekers.

* The Turnbull Government has allocated $86.3m over four years to increase gas production and overcome state government and landholder opposition to the development of new domestic gas reserves.

* Net government debt is expected to stand at A$375.1 billion in 2018-19.

* The government credit limit has been raised to $600 million – that is the amount of debt it can incur via Commonwealth government securities issued.

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