Abbott government’s first Budget: How your hip pocket will be hit

WE all know about the proposed new deficit tax — but what else is tipped to be coming our way when Treasurer Joe Hockey hands down his first budget?

Older worker ... Joe Hockey has announced the pension age will rise to 70 by 2035. Picture: Thinkstock

CABINET ministers are putting the finishing touches on what we are being warned will be a tough budget, as they sit down in Canberra today.

In the lead up to next Tuesday, Prime Minister Tony Abbott has insisted all Australians will have to share the burden of repairing the books.

We all know about the proposed new deficit tax but what is tipped to be coming our way when Treasurer Joe Hockey hands down his first budget on May 13?

A deficit levy:

Without a doubt the most controversial measure of the upcoming budget, already criticised by voters, former Treasurer Peter Costello and even members of the government.

Tony Abbott has refused to rule out a temporary deficit levy in a bid to help share the load of repaying the nation’s debt.

After concerns it could hit those with taxable incomes of more than $80,000, it is now more likely to kick in above incomes of $150,000.

Take note ... The deficit levy is without a doubt the most controversial measure of the upcoming budget. Picture: Thinkstock

Work until you’re 70:

Joe Hockey has announced the pension age will rise to 70 by 2035.

The decision builds on the already scheduled increase under Labor to 67.

Prime Minister Tony Abbott has said he will take further reforms to pension indexation arrangements and eligibility thresholds to the election in three years’ time.

Older worker ... Joe Hockey has announced the pension age will rise to 70 by 2035. Picture: Thinkstock

A co-payment to see the GP:

A Medicare co-payment is on the cards in the May budget, now reported to be $7.50.

Both Health Minister Peter Dutton and Tony Abbott have stressed Medicare is not sustainable and the government can’t continue to hand out “free services” to those who can afford to pay.

But it is not expected to be near the $15 price tag the Commission of Audit proposed.

Health at a cost ... Going to the doctor is about to get more expensive. Picture: Thinkstock

Paid Parental Leave to go ahead, but with reduced cap:

Despite the painful budget the Prime Minister insists he remains “absolutely committed” to introducing his Paid Parental Leave Scheme next year.

But he has decided to reduce the salary cap from $150,000 to $100,000.

That means the most a mother can pocket for 26 weeks paid leave at their actual wage is $50,000.

Bumpy road ahead ... The most an expectant mother can pocket for 26 weeks paid leave at their actual wage is $50,000. Picture Thinkstock

Welfare handouts and work shake-up:

The Coalition appears on track to reduce the eligibility threshold for family benefits to $100,000.

School leavers won’t be able to apply for the dole for six months under an initiative to encourage young people to find work.

There will also be other measures to increase opportunities for older Australians and people with disabilities.

Surplus?

Tony Abbott has said his first Budget will bring Australia close to a surplus and on track to a “strong surplus” within a decade.

Not all doom and gloom, there will be eventual tax cuts:

The Coalition hopes with the measures it puts in place this Budget, personal tax cuts will be possible in four or five years’ time.

Originally published as Abbott government’s first Budget: How your hip pocket will be hit