Releasing his first federal budget, Treasurer Scott Morrison was keen to highlight its special nature.
"This cannot be just another budget, because these are extraordinary times. This Budget is an economic plan, it's not just another budget."
Mr Morrison says there are three key target areas:
- growing the economy and growing jobs,
- removing disincentives to growth within the tax system,
- and balancing spending and revenue measures to ensure the government lives within its means.
"Australians know that our future depends on how well we continue to grow and shape our economy as we transition from the unprecedented mining investment boom to a stronger, more diverse, new economy."
The budget forecasts a $37.1 billion deficit for 2016/17, much greater than the $33.7 billion anticipated in the mid-year review in December.
But Mr Morrison says that's been factored in.
"This Budget keeps us on a sustainable path to bring the Budget back into balance. The deficit in underlining cash balance terms is expected to reduce from $39.9 billion in 2015-2016, to $37.1 billion, or 2.2 per cent share of the economy, in 2016-2017. The deficit is then expected to fall to $6 billion, or jus 0.3 per cent of GDP, over the next four years to 2019-20."
Central to the government's plans ahead of the election proposed for July the 2nd is what the government is calling its Ten Year Enterprise Tax Plan.
It aims to support growth, higher wages and jobs by lowering the tax rate for companies over time to an internationally competitive level.
Mr Morrison says the 10-year strategy is aimed at overcoming the challenges of an economy that's already changing direction.
"An innovation and science program for start-up businesses. A defence plan for local manufacturing and technology. Export trade deals to generate new business opportunities. Tax cuts and incentives for small business and hardworking families. A sustainable Budget with crackdowns on tax avoidance and loopholes, and guaranteed funding for health, education and roads."
Generous superannuation tax breaks will be closed off from July the 1st, 2017, affecting about four per cent of Australians each year.
At the same time, about two million low-earning women are expected to benefit from a low income superannuation tax offset.
To get more young people into the workforce, a new program called Youth Jobs PaTH (path) will start next year to give them pre-employment skills training, internships and provide businesses with a wage subsidy, all at a cost of $752 million.
To build jobs, the government is offering a 20-year defence industry plan, as well as $50 billion in infrastructure and $2 billion for new dams and pipelines.
The government is also adopting one of the Federal Opposition's biggest proposed tax increases - tobacco taxes will rise by 12.5 per cent a year from September the 1st, 2017, to raise $4.7 billion over four years.
Labor had estimated its policy would raise almost $48 billion over 10 years, but the government says its measure will raise $28 billion over the same period.
The Treasurer says the Australian Taxation Office will get extra resources to reap $3.9 billion from addressing tax avoidance, and a so-called Google tax will be introduced.
"This will be added to new measures to combat multinational tax avoidance which will include embracing a new diverted profits tax as implemented in the United Kingdom that taxes multinationals on income they have sought to shift offshore at a penalty rate of 40 per cent."
Mr Morrison's also promising to strengthen protections for whistleblowers who report tax avoidance, and increase penalties for multinationals that fail to meet their compliance and disclosure obligations.
Funding for schools and hospitals in the Budget simply reiterates a deal signed with the premiers to deliver an extra $2.9 billion over three years for health, and a $1.2 billion education funding top-up between 2018 and 2020.
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