What the Federal Budget 2014 means for you
SICK people, students, families. There aren’t many people who escaped the axe in the Budget. Here’s everything you need to know.
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WE ARE all going to pay in some way. But some people will be hit more than others.
Joe Hockey and Tony Abbott incessantly told us that this Budget was going to be tough. But how tough?
Now we know. Here’s what it all means for you:
IF YOU NEED TO SEE A DOCTOR WHO BULK-BILLS ...
All the rumours were true. From July 1, 2015, you will have to pay a $7 “patient contribution” fee each time you visit your GP.
You’ll also get slapped with that charge when you visit out-of-hospital pathology and imaging services, such as getting an X-Ray or an MRI.
Concession card patients and kids under 16 years will only have to pay the contribution for their first 10 visits a year.
Doctors have discretion to choose who pays the fee, but there is a catch.
If GPs choose not to charge a patient, they won’t receive their $6.20 bulk billing consultation payment from the government.
IF YOU NEED A PRESCRIPTION ...
Chances are, you’re going to get whacked with a $5 prescription fee for each script you get filled. The fee will be introduced from January 1 next year* and will apply to any prescription subsidised by the government’s Pharmaceutical Benefits Scheme. For instance, the cost of the diabetes drug insulin will rise from $37.70 to $42.70.
But if you’re a concession card holder, you’re in luck. Instead of the $5, card holders will pay an extra cost of just $0.80.
For instance, if you are a concession card holder and you need to buy Dabrafenib, a treatment for malignant skin cancers, you would pay $6.90 instead of the previous price $6.10.
IF YOU DRIVE A CAR ...
Bad luck. Petrol prices are going to jump.
The government will reintroduce the twice annual indexation of fuel excise to the Consumer Price Index from August 1 this year.
The move will net the government $2.2 billion over the next four years. But there is a silver lining for commuters — the government will invest the funds in roads around the country.
On the agenda is an extra $229 million for updating highways, $200 million to reduce black spots and $350 million for the Roads to Recovery program.
The government will also invest $2.9 billion in building key highways including the East West Link in Melbourne, the WestConnex in Sydney, the Perth Freight Link in Western Australia; the Toowoomba Second Range Crossing in Queensland; the North-South Road Corridor in Adelaide and a number of Northern Territory roads will get upgrades.
IF YOU HAVE CHILDREN ...
It’s a mixed bag, with stricter eligibility requirements, cuts and a new benefit.
Some people will no longer be eligible for Family Tax Benefit B, which is largely paid to single-income families.
The eligibility threshold will be reduced from $150,000 to $100,000 from July 1, 2015. The supplement will also no longer be paid to families once their youngest child turns six.
But low income single parents will still get some extra help until their children are 12 years old. A new supplement will provide an extra $750 a year for each child aged between six and 12.
Two family payments will be trimmed. The Family Tax Benefit A end-of-year supplement will be reduced from $726.35 to $600 while the Family Tax Benefit B end-of-year supplement will be reduced from $354.05 to $300.
The Childcare Rebate will remain at $7500 per child. And for families receiving Tax Benefit A, the maximum income threshold before losing any of the base rate is now capped at $94,316 — no matter how many kids you have.
IF YOU’RE A PUBLIC SERVANT ...
Watch out. The government will axe 16,500 jobs over three years, by cutting 230 bureaucratic programs and 70 government agencies.
Part of this will be done through consolidating back office functions at Canberra-based agencies like the National Gallery, National Library and National Museum.
A further 3000 jobs are set to go at the Australian Tax Office.
The government will also provide $90.9 million over two years to support the sale of Medibank Private Limited (Medibank) while workers at Defence Housing Australia, the Royal Australian Mint and the registry function of the Australian Securities and Investments Commission could be in for a shake-up as the government provides $11.7 million for “scoping studies into future ownership options.”
IF YOU ARE A HIGH INCOME EARNER ...
Open your wallet. People who earn more than $180,000 a year are going to pay the debt levy for the next three years, starting July 1.
The fine print is a little complicated. If you’re on $200,000, you’ll pay $400. If you’re on $300,000, you’ll pay $2400.
If you’re like Prime Minister Tony Abbott and raking in $500,000, you’ll pay $6400 each year. Happily, every member of federal parliament will pay some of the levy — the base backbencher salary is $195,130.
IF YOU’RE PLANNING TO HAVE A BABY ...
Hold your horses. At least until July 1 next year. That’s when Tony Abbott’s controversial Paid Parental Parental leave scheme will come into force.
New mums will be eligible for a maximum salary of up to $50,000 over six months.
Some voters may have hoped for a more generous scheme. Until a few weeks ago, the Prime Minister‘s scheme was capped at a maximum payment of $75,000.
IF YOU ARE THINKING OF STUDYING …
Brace yourself for higher fees. The government plans to decrease its contribution towards course fees (which is currently 59 per cent) by an average of 20 per cent, so students will have to pay more. This will come into effect from January 2016.
Universities, TAFEs and colleges will also be able to set their own fees from this date, driving up the cost of some courses even more. PhD students will also have to pay an extra contribution towards their degree.
However, universities will have to contribute $1 out of every $5 of additional revenue they raise through fees, to a new Commonwealth Scholarship scheme so students from disadvantaged backgrounds don’t miss out. Students who have FEE-HELP and VET FEE-HELP loans will no longer have to pay a fee of up to 25 per cent, and TAFE and college students will also be able eligible for government assistance for the first time.
IF YOU ARE A UNIVERSITY STUDENT ...
You’ll have to start repaying your HELP (formerly known as HECS) debt earlier and you will also be slugged with a higher interest rate.
From July 1, 2016 graduates will begin paying HELP once they start earning over an estimated $50,638. This is lower than the expected cut-off for 2014-15, which is $53,345.
Interest rates charged on HELP debts will also rise. Currently students are only charged indexation linked to the consumer price index.
However, the government will change this so that it will become an interest rate that reflects the cost of providing the loan, which could be as high as 6 per cent.
IF YOU’RE UNEMPLOYED AND UNDER 30 ...
It will be much harder to collect unemployment benefits. And unemployed life is set to become very complicated.
New rules mean you’re going to have to wait six months if you want to receive Newstart or Youth Allowance and you’ve just left school or are a new jobseeker.
After that six month period, the government will provide you with six months’ worth of income support — although you’ll have to participate in Work for the Dole at 25 hours a week.
If you’re still unemployed after the first 12 months, the government will not support you for the next six months — except in the form of wage subsidies to employers as an incentive to hire you.
The tedious cycle of six months on, six months off continues.
People under 25 are also no longer eligible for Newstart, they will have to apply for Youth Allowance (Other) instead.
IF YOU WERE BORN IN OR AFTER 1965 ...
You will not be able to receive the pension until you turn 70. The pension age will rise to 70 in 2035, as foreshadowed by the government.
IF YOU’RE DISABLED ...
The National Disability Insurance Scheme has survived Joe Hockey’s cuts and will give a helping hand to hundreds of thousands of Australians.
The July 1, 2019 countrywide rollout appears to be on schedule, despite speculation the launch date could be pushed back further.
IF YOU’RE ON THE DISABILITY SUPPORT PENSION ...
If you’re under 35 and first received the DSP between 2008 and 2011, you’re going to have to jump through some serious hoops.
You will go through tougher eligibility tests and may be required to join Work for the Dole, job search, education, training or work experience schemes.
If you’re planning to jet off overseas for a while on the pension, you might as well cancel your trip.
You will only be allowed to spend four weeks a year overseas to still be eligible to collect the pension for the full year.
IF YOU LIVE IN WESTERN SYDNEY ...
Good news as you will receive the lion’s share of an $11.6 billion Infrastructure Growth Package. It’s part of $50 billion to be spent over the next seven years with $14.9 billion of that going to New South Wales.
Western Sydney will directly benefit from a dedicated infrastructure plan that includes development of an airport at Badgerys Creek as well as improved transport connections like a $2 billion concessional loan to help build the WestConnex.
IF YOU WORK FOR A STATE-OWNED ASSET ...
You might be getting a new boss. The government will spend $5 billion on an “Asset Recycling Initiative”.
That’s government-speak for encouraging states and territories to flog off their assets and reinvest the proceeds in infrastructure projects such as roads.
It’s a five year program that works on a first-come, first served basis and it’s expected to create assets for super funds and increase private sector investment.
IF YOU’RE LEARNING A TRADE ...
Good news. On top of existing support available, from July 1 the government will support those learning a trade by providing concessional Trade Support Loans of up to $20,000 over a four-year apprenticeship.
IF YOU’RE RETIRED OR RETIRING SOON ...
Nothing much will change in the next three years. But if you’re looking for an increase in the pension payment, you’re out of luck — any rises will now be pegged at inflation.
In three years’ time, the income and threshold test will change significantly. For the purposes of the pension income test, the government will change how it deems the return from a pensioner’s financial assets, from September 2017. The government will reset the deeming thresholds from $46,600 to $30,000 for singles and from $77,400 to $50,000 for couples.
However, the government will not include the family home in the means test as some people feared.
IF YOU’RE A MATURE AGE WORKER (OVER 50) ...
The government will introduce a wage subsidy at the cost of $304 million over four years from July to incentivise employers to hire you and keep you.
Employers will receive $3000 after six months of employment, $3000 after a year of employment, a further $2000 after 18 months and another $2000 after two years.
IF POLITICIANS MAKE YOU REALLY ANGRY ...
Well, their pay has been frozen … for one year. Apparently it will save the public $2 million.
It’s not like they don’t already have a substantial income. A Federal backbencher’s base salary is $195,130. Ministers earn much more, and the PM rakes in more than half a million dollars.
The Gold Pass, a controversial scheme which gives very experienced parliamentarians 25 free return domestic business class flights each year will be abolished. Thank goodness.
Correction: This story initially stated patients will pay $5 towards the cost of PBS prescriptions from July 1 2015. The correct date is January 1 2015.
Reporting by Daniel Piotrowski, Charis Chang, Victoria Craw and Wenlei Ma.
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Originally published as What the Federal Budget 2014 means for you