The Federal Budget 2015-16 is shaping up to be a big one, with talk of big changes to tax and businesses. Compared to last year’s broad-scale “budget repair job”, it’s clear that Hockey’s focus this year is on jobs and growth.
Already we know there will be a centrepiece “families package” targeted at working parents paying for childcare, and a small business tax cut which we talked about previously on our social media.
Changes to pensions are also on the agenda and we could see a halt on other welfare payments. According to Tony Abbott, we should receive a budget that will put us on track for a surplus and position the Australian economy in a steadfast position.
Here’s a wrap-up of what we know so far:
Falling revenue:
Iron ore price plummets. Prices reached an all-time high in February 2011. By the end of March 2015, prices were down to USD$58.
Abbott revealed in April that the falling iron ore price – down below $50 per tonne in March and April – had blown a hole of $30 billion over four years in the budget. Joe Hockey has said Treasury is contemplating a price of $35 per tonne in its estimates.
Health cuts
Sources from the ABC have confirmed Health Minister Sussan Ley will be cutting $3 billion over the next five years from the money the Government pays drug companies for medicines and what it pays chemists to dispense them.
There will also be a wholesale review of every test, treatment and procedure subsidised under Medicare, but the Government insists this would not prompt another push for a GP co-payment.
Families package
So far, it has been announced there will be a new subsidy for nannies in a two-year, $250 million trial program to start in January.
The government has made it clear that the focus will be on getting low and middle-income parents to work more and support those facing disadvantage.
Small business tax cut
Abott has already confirmed in February that there would be a tax rate cut for small businesses, at least 1.5 per cent from July 1, 2015.
In April, he formally confirmed big business would not receive a tax cut, as promised in the 2013 election campaign.
Pensions
Although the Government announced a cut to the indexation rate of pensions in last year’s budget it has been blocked in the Senate, meaning Plan B has come into place.
Speculation supposes that an ACOSS idea to lower the assets test for wealthier retirees and an increase to the taper rate will take place, which would mean part-pensioners would lose more of their payment the more assets they have excluding the family home. This has also been confirmed by the Treasurer this week.
‘Google tax’
This has been a hot topic amongst many business officials. The Government has indicated it may bring in new measures to target multi-national companies which currently save billions by paying most of their tax in countries that are lower-taxing than Australia.
The ‘Google tax’ has just been introduced in the UK at a rate of 25 per cent, and will target multinationals with sales of more than 10 million pounds in Britain.
Iraq conflict
In December’s budget update, the cost of sending troops and aircraft to the Middle East was estimated to cost $306 million.
Previously, the Prime Minister said it would cost around $500 million a year.
Troop numbers were boosted by 300 in March at an expected cost of $100 million a year.
No more public service cuts
The Prime Minister said in mid-March the federal bureaucracy was safe from any more ‘major’ downsizing.
It lost 15,000 staff between mid-2012 and the end of 2014.
So that’s it for now. The rest will have to wait until the budget is released on May 12, 7.30 AEST.
