"My determination is to ensure that this budget is fair"
[Australian Prime Minister Tony Abbott speaking
with 3AW's Neil Mitchell, May 2015]
Only time will tell just how 'fair' this federal budget is. It still contains elements of Tony Abbott's desire to penalise the poor and vulnerable at every opportunity, his determination to avoid funding climate change initiatives or water savings measures where possible and his seeming need to stifle innovation and science.
Here are some of the features of the Abbott Government’s 2015-16 Budget:
* The
government is providing $131.3 million over three years to help the telecommunications industry meet their
initial capital costs of retaining all metadata belonging to phone and internet
accounts held by Australian citizens.
* Income management will continue for another two years in all twelve locations where it currently operates, with possible expansion to four new communities at a cost of $145.8 million and with these scheme trials ending on 30 June 2017. However, the scheme will no longer include Voluntary Incentive Payments and the Matched Savings Payment.
* The government will also spend $2.7 million over three years from 2014-15 to undertake a trial of new welfare debit card arrangements in up to three communities, based on the recommendations made in the report Creating Parity — the Forrest Review, with locations to be determined in consultation with key stakeholders.
*Low Income Supplement — cessation. This represents the loss of an annual $300 payment to eligible low-income households.
* Personal Contact Interviews will be removed from the repertoire of activities required of individuals receiving unemployment benefits. However, from 1 July 2016, the Government will extend the ‘no show no pay’ principle to missed appointments and activities like work for the dole, to encourage positive job seeker behaviour and compliance. Job seekers who fail to undertake adequate job search will be subject to income support payment suspension until they demonstrate genuine job search efforts. These job seekers would also no longer be able to have the financial penalty waived by agreeing to undertake a compliance activity.
* Cessation of the Large Family Supplement of Family Tax Benefit Part A. Large families will continue to receive a per child rate of FTB Part A for each eligible child in their family.
* Family Tax Benefit Part A — reduced portability. With some exceptions the amount of time Family Tax Benefit (FTB) Part A will be paid to recipients who are outside Australia will be reduced to 6 weeks in every twelve months they are overseas.
* 1 July 2016 onwards the government is removing all or part of federal paid parental scheme entitlements for to an estimated 79,000 working women expected to take maternity leave. Under federal legislation these women had an expectation of receiving up to $11,500 for maternity leave of 18 weeks duration.
* From 1 January 2017 the government will reduce from 26 weeks to six weeks the period that some recipients of the Age Pension, Wife Pension, Widow B Pension and the Disability Support Pension can be paid their full basic means-tested rate while absent from Australia. After six weeks absence from Australia, pensioners who have lived in Australia for less than 35 years will be paid at a reduced rate proportional to their period of Australian Working Life Residence (AWLR). The AWLR is the period a person has lived in Australia, as a permanent resident, between the age of 16 years and Age Pension age.
* The Government will not proceed with changes to eligibility thresholds for Australian Government payments for the next three years that relate to the Age Pension, Carer Payment, Disability Support Pension, and the Veterans’ Service Pension income test free areas and deeming thresholds over three years from 2016-17. The pension income test free areas and deeming thresholds will continue to be indexed annually by the Consumer Price Index. This means that 170,000 extra pensioners with moderate assets will now receive a full or increased pension. At the same time, the asset test taper rate will increase from $1.50 to $3. This means for every $1,000 of assets over the asset free threshold (eg. $202,000 threshold for a single homeowner age pensioner & 286,500 for home owning age pension couples), the pension rate will reduce by $3 a fortnight. Those who no longer receive a pension will remain eligible for a Commonwealth Seniors Health Card or Health Care Card. The Government has decided not to proceed with the 2014 Budget measure to index pension and pension equivalents by CPI alone.
* The government will pause for a further two years the indexation of 78 programmes under the Administered Programme Indexation Pause measure announced in the 2014-15 Budget. For each programme, the extension of the pause to indexation will apply from 1 July 2017 or 1 July 2018 depending on the original start date of the pause.
All elements of the Indigenous Advancement Strategy do not appear to be resuming indexed funding until 2018-19.
Department of Veterans’ Affairs dental and allied health provider payments will not resume being indexed until 1 July 2018.
* A new single Child Care Subsidy (CCS) will be introduced on 1 July 2017. Families meeting the activity test with annual incomes up to $60,000 (2013-14 dollars) will be eligible for a subsidy of 85 per cent of the actual fee paid, up to an hourly fee cap of $11.55 for long day care, $10.70 for family day care, and $10.10 for outside school hours care. The subsidy will taper to 50 per cent for eligible families with annual incomes of $165,000. The CCS will have no annual cap for families with annual incomes below $180,000. For families with annual incomes of $180,000 and above, the CCS will be capped at $10,000 per child per year.
* Cooperative Research Centres — reduced funding. Lost funding will be $26.8 million over four years from 2015-16.
* Industry grant programmes — reduced funding. Lost funding will be $31.7 million over three years from 2014-15 and will apply to the following programmes; Commercialisation Australia, Enterprise Connect and Industry Innovation Precincts.
* Regional Development Australia Committees — reduced support. This loss of support activity represents $3.6 million over four years.
* Sustainable Rural Water Use and Infrastructure Programme — reduced funding. Loss of $22.7 million in water buyback funding over two years from 2017-18.
* National Low Emissions Coal Initiative — funding adjustment. Funding for the Australian National Low Emissions Coal Research and Development Project will be reduced by a one-off $3.4 million before 30 June 2015.
* The
Government will abolish the Commonwealth
Scientific and Industrial Research Organisation (CSIRO) Environment Strategic
Advisory Committee, as the function has been reallocated by CSIRO to the
relevant flagship advisory committee. IIF
Investments Pty Ltd, and its assets, have been transferred to the
Department of Industry and Science. IIF Investments was
established as a mechanism to deliver the Government’s capital into the venture
capital funds licensed under Rounds 1 and 2 of the Innovation Investment Fund
(IIF), PreSeed Fund (PSF) and Renewable Energy Equity Fund (REEF) programmes. It
will also dissolve the Bureau of
Resources and Energy Economics (BREE) and the Consumer Advocacy Panel.
* The Government will reduce the company tax rate to 28.5 per cent for companies with aggregated annual turnover less than $2 million. Companies with an aggregated annual turnover of $2 million or above will continue to be subject to the current 30 per cent rate on all their taxable income. Individual taxpayers with business income from an unincorporated business that has an aggregated annual turnover of less than $2 million will be eligible for a small business tax discount of five per cent of the income tax payable on the business income received from an unincorporated small business entity. The discount will be capped at $1,000 per individual for each income year, and delivered as a tax offset.
* Application of the Goods and Services Tax (GST) will be extended to cross border supplies of digital products and services imported by consumers from 1 July 2017.
* Under the new arrangements, increased criminal penalties and a new civil pecuniary penalties regime will be introduced for breaches of the Foreign Acquisitions and Takeovers Act 1975. A reduced penalty period for foreign investors that have previously breached the foreign investment rules in relation to residential real estate has been provided until 30 November 2015. These investors may avoid prosecution, but will be required to divest the property.
* Stronger Relationships Trial — cessation. Those couples with a $200 pre-marriage relationship counselling subsidy will have these honoured up until 30 June 2015 for couples who registered prior to 9 February 2015.
* Expenses under the broadcasting sub‑function are estimated to decrease by 3.2 per cent in real terms from 2014‑15 to 2015‑16 and by 8.5 per cent in real terms from 2015‑16 through to 2018‑19. Due to these cuts the Special Broadcasting Service (SBS) is reportedly withdrawing from the digital platform FreeView so if viewers wish to see a certain documentary, drama, comedy or current affairs show they will have to view it on their television at the time of broadcast and wait for any televised repeat in the future if they miss doing so.
* The Australia Council arts funding will be
cut by $110 million between 1 July 2015 and 30 June 2019. This arts funding
will be transferred to the Attorney-General’s Department to be distributed at
its direction of the Attorney-General.
While Thursday
marks the 29th anniversary of Paul Keating's famous "banana republic"
warning that ushered in two decades of more disciplined government, more than
$1 out of every $4 created by the economy will be taxed and consumed by
the Abbott government.
According to
a Treasury measure of the "call on
resources", which gauges the tax and borrowings needed to fund
the government, the burden will hit 26.7 per cent in 2015-16 and 2016-17…..
The budget
papers show the measure will remain at more than 26 per cent for at
least four years, until 2018-19. The figure looks better than it seems in
the final year, which is when the federal government plans to cut $80
billion in funding to states.....
Between 1987 and 2013 the size of government breached 26-per cent only once, in 2009-10, when the Labor government's stimulus package led to increased borrowing. It climbed above that level for only the second time in 26 years in 2013-14, which was the Coalition's first budget, and it has remained there since.