There are no
real winners in this 2018-19 federal budget – everyone loses something because funding/staffing cuts include services which affect the smooth running of the country, such as regulatory
oversight, law, policing and communication.
Partial winners in the longterm are those in the two highest income/asset deciles. The Anthony Pratts, Gina Rineharts, 'Twiggy' Forrests, Bruce Mathiesons, Malcolm Turnbulls and Peter Duttons of this world.
Those losing the most are low income households, especially those dependent on welfare payments and those with an annual salary/wage between $41,000 to $87,000 because they will be assessed under the same tax rate as now but with less of the tax benefit pie on their plates in the future.
Federal Budget 2018 Facts of Life - a non-exhaustive list
* Funding in
this budget does not fully compensate for funding cuts and tax increases in the
last three federal budgets.
* Cuts from
previous budgets are still impacting on health services; education funding for schools and vocational studies have been reduced by a combined total of $17.27 billion, funds for the public broadcaster are
frozen representing a loss of $84 million on top of $254 million in budget cuts since 2014.1
* Cuts are
also occurring in:
Australian
Securities and Investments Commission (ASIC) with permanent
funding cut from $346 million to $320
million over two years and staff numbers reduced by 30 investigators in the next
year.
Office
of the Director of Public Prosecutions with funding cut from $77.4
million to $73.75 million in two years.
The
Australian Federal Police funding cut from $1.03 billion to $926
million within four years.2
* Although the
federal government is contributing $43 billion, to fund what it calls its “share”
of the National Disability Insurance Scheme (NDIS) from 2018–19 to 2021–22, there is
still no dedicated funding stream for NDIS.
* Rural, regional
and remote area health is only receiving 16.66 million a year for five years to
improve health outcomes in those areas across Australia – none of which appears to go directly to treatment of patients or additional services.
* Personal
income tax cuts aren’t being offered to those on taxable incomes below $20,548
per annum. Those workers
with a taxable income of $20,548 will receive $1 a year in income tax relief. It is reported that the full range of personal income tax relief (which provides the most benefit to the highest earners) will eventually cost est. $17.8 billion annually in lost government revenue if scheme continues until 2027.
* Individuals earning $100,000 to $125,330 per annum now receive a low and middle income income tax offset despite being in high wage/salary deciles.
* There are estimated 101,508 older Australians on the waiting list for appropriate home care packages.4 At least 60,000 of these do not have even the initial lowest level of home care package and, all the federal government is offering is funding for an extra 14,000 high level packages still leaving 46,000 elder people with no hope of receiving assistance in the foreseeable future to keep living at home.
* Individuals earning $100,000 to $125,330 per annum now receive a low and middle income income tax offset despite being in high wage/salary deciles.
* There are estimated 101,508 older Australians on the waiting list for appropriate home care packages.4 At least 60,000 of these do not have even the initial lowest level of home care package and, all the federal government is offering is funding for an extra 14,000 high level packages still leaving 46,000 elder people with no hope of receiving assistance in the foreseeable future to keep living at home.
* There is a
proposal to change the progressive tax system from 2018-19 so there are only
four income tax brackets and people with incomes from $41,000 to $200,000 per
annum will pay the same tax rate. This means that est. 62 per cent of future
benefits would go to the highest salary/wage earners with only 7 per cent going
to those on the lowest wage.5
According
to Budget Strategy and Outlook Budget
Paper No. 1 2018-19; When completed,
the plan ensures that about 94 per cent of taxpayers are projected to face a
marginal tax rate of 32.5 per cent or less in 2024–25.
* People over retirement age receiving the Age Pension are being
urged to consider funding part of their retirement through the Pension Loans Scheme which will be expanded on
1 July 2019, with the available fortnightly loan plus pension amount increasing
to 150 per cent of the maximum rate of fortnightly Age Pension. The current
maximum fortnightly pension amount is $907.60. This loan will normally be repaid
when the secured real estate asset (usually the principal home) is sold or from
the pensioner’s deceased estate.6
* This budget continues the funding model which skews federal primary and highschool funding towards private schools via the Quality Schools scheme with funding for government schools set at $7.6 billion and non-government schools at $11.8 billion in 2018-19 increasing to $9.6 billion and 13.8 billion in 2021-22 .7
* The Northern Territory remote area Aboriginal children and schooling component has been cut by over $47 million across the next four financial years.
*TAFE further technical education funding has been cut by $270 million on top of previous budget cuts.
* This budget continues the funding model which skews federal primary and highschool funding towards private schools via the Quality Schools scheme with funding for government schools set at $7.6 billion and non-government schools at $11.8 billion in 2018-19 increasing to $9.6 billion and 13.8 billion in 2021-22 .7
* The Northern Territory remote area Aboriginal children and schooling component has been cut by over $47 million across the next four financial years.
*TAFE further technical education funding has been cut by $270 million on top of previous budget cuts.
* The Goods
and Services Tax has been extended to cover online hotel bookings made via
offshore websites. This is expected to raise $5 million in the 2019-20
financial year.
* Mobile blackspot
program funding ceases in 2019.8
* The cashless
debit card trial in Ceduna (South Australia) and East Kimberley (Western
Australia) will be extended for another year to 30 June 2019. The federal government
refuses to make the costs of this measure public.
* Part or all
of a welfare payment will be withheld to clear a welfare recipients court fines or address arrest
warrants.
* There has
been no increase in unemployment benefits.
* Women &
girls necessary sanitary products are still subject to a consumption tax
payable at the supermarket/chemist checkout.
* Finally,
the Turnbull Government cracked a joke in the budget papers – a new National
Energy Guarantee is expected to reduce annual residential power bills by $400
at some unspecified date in the future.
Footnotes:
2. http://www.afr.com/news/policy/budget/federal-budget-2018-asics-shock-26m-budget-cut-20180509-h0zud4
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