Bunnies and rodents win, foreign investors lose.
Australian Treasurer Scott Morrison’s hard-hitting budget has made losers out of banks and foreign investors, finding billions in revenue through a banking levy and tighter capital gains restrictions.
But with an increase in the Medicare levy of half a per cent scheduled to start in 2019, all Australian workers will be forced to help out balancing a budget the Treasurer says is “about making the choices to secure better days ahead”.
All dollar amounts cover the four-year forward estimates period.
WATCH: Treasurer Scott Morrison talks to SBS
The government is overhauling assistance to veterans by renegotiating deals with private hospitals to save $171 million over four years to reinvest in veterans services.
$34 million will be used to expand mental health services for veterans, alongside $10 million for a new scheme to prevent veteran suicide and $9 million for the veterans’ counselling service.
$12 million has been allocated for two new programs helping veterans back into the workforce.
And a new $167 million “veteran centric” reform aims to deliver support to the veterans who need it.
Watch: Treasurer Scott Morrison on the Budget balance
A $250 million package has been set aside to provide tax benefits for people using superannuation to fund a first home deposit.
Up to $30,000, based on contributions of $15,000 per year starting on July 1 – money that would otherwise go into superannuation – can be used in the scheme.
Both members of a couple buying their first home can use the scheme.
Reducing one barrier between older Australians and down-sizing, the government will allow someone who sells their home a non-concessional superannuation contribution of up to $300,000.
More than $2 billion in “zombie measures” in health have been abandoned.
$1.2 billion in new medicines will be made available, the bulk billing incentive for diagnostic imaging and pathology will remain, and the Pharmaceutical Benefits Scheme co-payment will no longer increase as planned.
Watch: Scott Morrison on Medicare and PBS
Bunnies and rodents
Animals can no longer be used for testing of cosmetic products from July next year as part of a suite of reforms aimed at eliminating cruelty in the sector.
New data on cosmetic ingredients derived from animal tests will be banned as well, and the industry will be asked to sign up to a code of practice to standardise codes on labels.
In the lead-up to the Gold Coast Commonwealth Games in 2018, the government is spending $16 million specifically on athletes.
That funding is in addition to $34 million for the Defence Force to support the games and the Queen’s Baton Relay, and $12 million for other games operations.
An additional 0.5 percentage points will be added to the Medicare levy from 2019, generating $8.2 billion in revenue, under the guise of paying for the National Disability Insurance Scheme.
The cost to set up the body policing the use of parliamentary entitlements triggered by Bronwyn Bishop’s $5000 helicopter ride will also be met by the taxpayer - more than $13 million.
New migrants seeking welfare
Under changes to residency requirements for the age pension and disability support, people will now need to be in continuously Australia for 15 years – up from 10 years.
The 10-year threshold will still be eligible for those who have spent more than five years in Australia below the pension age or have avoided welfare for five years as part of their application period.
Smokers of ‘rollies’ cigarettes
‘Roll your own’ tobacco will be stung with greater import excises to bring those taxes into line with regular cigarettes.
The measure will earn the government $360 million.
The immediate write-off of tax deductible purchases up to $20,000 in place since the 2015 budget has been extended and the Government is also spending $15 million on the small business community about what programs and support are available to assist them.
However businesses hoping to employ foreign workers on temporary visas will pay an additional $1200 per visa per year for each employee on a Temporary Skill Shortage visa or $3,000 for each employee being sponsored for a permanent.
Visa charges will also rise with inflation from July, earning the government $410 million.
Banks and executives
A mammoth $6.2 billion levy has been forced upon Australia’s big five banks for no reason other than, as the Treasurer said, they can afford to pay it as part of the effort to balance the budget.
A $4 million scheme to improve accountability will also mean the regulator can remove and disqualify senior executives, impose new penalties and defer remuneration for senior executives.
$303 million will be withheld from foreign development assistance over two years from 2019 by pausing indexation.
It also means when indexation resumes in 2021, the level of assistance will grow only from the new figure - saving approximately $100 million for every subsequent year.
Investors in Australian property from overseas are major losers in the budget, losing $600 million in capital gains concessions on top of restrictions over investment in new developments and new charges for underutilised property.
$20 million has also been allocated to the Australian Tax Office to enforce the foreign investment rules.
Watch: Scott Morrison on foreign investment
Interstate housing investors
Deductions for travel expenses related to inspecting, maintaining or collecting rent for a residential rental property will be barred from July 1st, but investors can still claim deductions for property management services.
This change earns $540 million.
Recipients of Newstart aged between 30 and 50 will need to pass more onerous activity tests – up to 50 hours per fortnight from 30 hours previously.
Those aged between 55 and 60 can only volunteer in order to meet half their activity obligations, and those between 60 and 65 will also need to seek work or volunteer 10 hours per fortnight.