Federal Budget 2016: Your 5 minute guide to the Budget

CONFUSED by the Federal Budget? Here’s a quick guide to what you need to know.

• Federal Budget 2016: What the Budget means for you
• Federal Budget 2016: Cash with a catch for job seekers
• Federal Budget 2016: Making everyone happy just too expensive
• Federal Budget 2016: Working parents lose out
• Federal Budget 2016: Budget calculator to run your numbers

CONFUSED by the Budget? Here’s a 5-minute guide to what you need to know.

Job seekers

The Government wants to get an extra 120,000 into work through new 4-to-12-week internships that will attract a $200 bonus payment on top of the dole. And employees will get subsidies of up to $10,000 for hiring them. Young people will be encouraged to start their own businesses with organised training and mentoring. But all unemployed people will now Work for the Dole after they’re been on Newstart for 12 months.

Childcare

A planned streaming of childcare rebates and benefits that would mean extra assistance for lower income families has been delayed by a year to 2018. That’s because reforms to tighten Family Tax Benefit payments that were to pay for it have not passed the Senate. Meanwhile, the childcare rebate remains capped at $7500 as centre fees go up.

Welfare
A Try, Test and Learn fund to get long-term unemployed into jobs will be launched at a cost of $96.1 million over four years. Early intervention trials will run to try and stop people sliding into long-term welfare dependence, like one building parenting skills among those with mental illnesses or who are in jail. About 90,000 people on the Disability Support Pension will be reviewed to check whether they should be in work. And a third trial site will be named for the cashless welfare card.

Retirees

The wealthy will lose lucrative superannuation tax breaks that will boost coffers by $2.9 billion. But the Government says 96 per cent of people will be better off under planned changes. Among them are perks to encourage new mothers to top up their superannuation on returning to work and making it possible for partners to make contributions to a spouse’s fund.

Small business

Almost 900,000 companies with an annual turnover of $10 million will get an immediate tax cut to 27.5 per cent. It means 870.000 businesses employed 3.4 million people will have their tax rate reduced. It’s the start of a phased down plan that will eventually see all businesses on a 25 per cent tax rate in a decade. The Government says the move will encourage businesses to hire more people. In an extension of an existing program, an extra 90,000 extra small businesses will be able to claim immediate tax deductions on assets worth up to $20,000, from a new ute to a new coffee machine. The changes will cost the Budget $5.3 billion over the next four years, but the Government says that’s offset by other savings. All businesses will also qualify for incentive payments of between $6,500 to $10,000 to employ young jobseekers and $1,000 to let them intern.

Tax

The Government has tinkered with tax across a range of areas. Among the winners is an average fulltime worker, who gets a reprieve as the middle income tax bracket lifts from $80,000 to $87,500. Meanwhile, multinationals avoiding tax face a crack down. There’s a new 40 per cent penalty rate for those caught out and a new ATO taskforce to prosecute cheats.

North

New dams will be built from a new $2 million Water Infrastructure Loan Facility as the Government tries to position the north as a food bowl for the burgeoning Asian middle class. Beef roads will be improved with a $100 million injection to get cattle to market and a $5 million feasibility study will examining opening up the north with a rail line from Mt Isa westward to Tennant Creek.

Treasurer Scott Morrison speaks with members of the media in the budget lockup at Parliament House. Picture: Getty

Health

People are likely to pay more to visit the doctor as the Medicare rebate is frozen until 2020 at the same time as prescription medicines rise by $5 from next year. Another pause on the Medicare Levy Surcharge indexation means a greater tax penalty for some. Meanwhile, an extra $2.1 billion in NDIS funding will help people with disabilities.

Education

The Government has walked back on plans to allow full deregulation of university fees and is instead considering allowing institutes to set their own fees for their most prestigious “flagship” courses. Also under consideration is whether to make student pay back their loans sooner at a higher rate for higher income earners to arrest the skyrocketing cost of higher education to the Budget. Meanwhile, preschoolers will learn a foreign language from 2017.

THE NUMBERS

Australia will record a $37.1 billion deficit next year, falling to $6 billion in 2019-20. The Government thinks it can balance the books in 2020-21 — a year later than it said last year — as the economy grows by 3 per cent a year by 2017-18. The unemployment rate is expected to fall from 5.75 per cent this year to 5.5 per cent.

GOING UP

— Cost of a GP visit

— Prescription medicine

— Your passport application by $20

— Price of cigarettes

GOING DOWN

— Company tax rate

— Numbers of public servants

— Duty free cigarette allowance

— Cost of specialist breast cancer screening

Originally published as Federal Budget 2016: Your 5 minute guide to the Budget