Federal Budget 2016: Don’t expect sweeteners, Treasurer warns

DON’T expect too many “pre-election goodies”, Treasurer Scott Morrison has warned on the eve of the Federal Budget.

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DON’T expect too many “pre-election goodies”, Treasurer Scott Morrison has warned on the eve of the Federal Budget.

Besides, South Australia has already had a pretty big sweetener in the $50 billion Future Submarines project.

The Government can afford to have bigger infrastructure promises for the other states while it’s in SA’s good books anyway.

Mr Morrison will hand down his first Budget tomorrow and is framing it as a long-term economic plan rather than their pitch for the July 2 election (but we know it’s that, too).

There will be no “fistful of dollars”, he says — although this Government is determined to help those who help themselves so we’ll see more unlocking of the Asset Recycling Scheme (the State Government is hoping it can sell the Motor Accident Commission and get the 15 per cent Federal bonus) and we might see more “agile” policies that don’t require big Government investment.

The Budget is set to include a crackdown on superannuation concessions for the rich, and modest income tax cuts. Those cuts, likely to affect those earning $80,000 or more, are intended to offset “bracket creep” where inflation pushes taxpayers into a higher tax bracket.

Mr Morrison told The Advertiser there had been “all sorts of wild speculation” about tax cuts and that those earning less than $80,000 had effectively already got a tax cut when the Coalition abolished the carbon tax but kept the compensation for it in place.

The Government will pitch the Budget as being about jobs, growth, and a steady pair of hands steering the ship towards a future surplus.

For SA, it’s still mostly about the boats.

“I think most of the major announcements have been clearly flagged for South Australia, and those commitments are significant; particularly on Defence,” Mr Morrison said.

That investment would have “spill-out effects across the country”.

Mr Morrison has faced questions over the scale of the spend when the Government is also talking about “living within its means” but he says Australia had to get the best deal, and the best deal was the French bid.

That won’t stop dry economists and the other states moaning about it, though.

Maybe the Government hopes the infrastructure sweeteners will help them swallow the medicine.

What we know so far

TAX CUTS

Anyone earning more than $80,000 will secure modest relief from July 1, the day before the election.

The decision to increase the $80,000 threshold before the 37 cents in the dollar rate kicks in will stop 300,000 people hitting that second highest bracket.

Company tax relief and measures to help small and medium businesses are also expected.

CIGS UP

Smokers should be prepared for another increase in tobacco excise.

SUPER

Crackdown on tax concessions for the wealthy to save for retirement, expected to kick in at $250,000 a year, will be the big change.

NEGATIVE GEARING

No changes to negative gearing in the Budget.

Labor’s policy will ban negative gearing for property investors on existing homes but allow it for new builds.

SCHOOLS

A $1.1 billion boost for schools demanding the states deliver a back to basics approach on literacy and numeracy.

The plan includes a requirement that trainee teachers specialise in literacy and numeracy and that Year 1 students face numeracy and literacy testing.

There is also expected to be $118 million in funding for disabled children in schools.

HEALTH

Subsidised dental care for all children and $2.9 billion in health funding.

CARPAGEDDON

$15 million for a National Carp Control Plan that aims to decimate the fish in the River Murray.