Treasurer Josh Frydenberg’s Budget delivers $158b tax cuts
Treasurer Josh Frydenberg has handed down the Morrison Government’s first Budget including a tax relief for 10 million Australians, a massive infrastructure spend and the first surplus in 12 years. SEE WHAT IT MEANS FOR YOU.
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TEN million Australians will be showered with a further $158 billion in tax cuts - with the average earner saving $10,000 over six years - under a Morrison Government Budget that tops Labor’s pledge and draws stark battle lines for the May election.
Trumpeting a $7.1 billion surplus – the first in 12 years – Treasurer Josh Frydenberg last night declared his economic blueprint a “back to black, back on track” Budget, that “helps secure a better life for all Australians”.
The pre-election Budget supercharges rewards for workers, small business, older Australians, women and youth; outlays a $100 billion infrastructure bonanza, and guarantees key services, including unfreezing the freeze on the remaining GP services on the Medicare Benefits Schedule.
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Warning of the risks under a Shorten-led government, the Treasurer last night laid the foundation for a campaign to be fought on taxes, economic management and infrastructure.
With an economic blueprint rewards most Australians and has little sting, Prime Minister Scott Morrison is expected to call a poll by the end of the week before making a beeline to Queensland on Monday to help sandbag eight marginal seats.
He will spuik a national plan that delivers:
■ $158 billion in extra personal income tax cuts, on top of the $144 billion announced at last year’s Budget;
■ $500 million commuter car park fund to get more cars of the road and cut congestion;
■ $3.9 billion for a new emergency response fund to help with future natural disasters;
■ $525 million for a new skills package that will create 80,000 new apprentices;
■ 10 new training hubs to help slash high youth unemployment in regional areas;
■ A new $30 million local school community program to upgrade libraries, classrooms and play equipment;
■ 10 new home care packages for ageing Australians;
■ $84 million to give carers a break;
■ $100 million to help restore local waterways and help threatened species; and
■ Increasing and extending the instant asset write-off for small business.
If the Coalition wins its third term, it will deliver the biggest tax cuts since the Howard government.
They will flow from July, doubling the hip pocket relief from last year’s tax cuts to $1080 for workers earning the average wage of about $80,000.
Families on a dual income will keep $2160 of their earnings through a boost to the low-and-middle-income tax offset.
More than 10 million workers will receive a tax cut with about 4.5 million Australians receiving the full offset for the 2018-19 income year.
Under Labor, workers on $80,000 a year would get a $928 tax cut.
The Government will not rush to legislate the tax cuts but wants to force Australians to think about the choice at the ballot box – a Government cutting personal income taxes without raising taxes, and Labor, which it accuses, of drowning Australia with $200 billion in taxes. It wants a mandate to push the tax cuts through after the election.
The Government wants the sugar hit tax cuts to be spent quickly to offset softer growth figures next financial year.
Real GDP growth was projected to grow by 3 per cent in December’s Mid-Year Economic and Fiscal Outlook but in yesterday’s Budget they had been downgraded to 2 3/4.
“This is money that could go towards you monthly mortgage payment, your quarterly power bill or your yearly car insurance,’’ Mr Frydenberg said in his Budget speech last night.
“This relief will flow quickly and be available to Australians after tax returns for the 2018/19 years are submitted in 13 weeks’ time.
“This tax relief will lift household incomes, ease the cost of living pressures and boost spending at local businesses.”
Upping the tax cut battle with Labor, the Government also announced it would lower the 32.5 per cent tax rate to 30 per cent from July 2024.
It will cover all taxpayers earning between $45,000 and $200,000, meaning 94 per cent of taxpayers will pay no more than 30 cents in the dollar.
A worker earning about $80,000 a year will save $875 a year.
The massive infrastructure spend that Mr Frydenberg says will mean Australians will see “cranes, hard hats and heavy machinery … across the country”, is calibrated to ensure jobs are continued to be created in the medium term.
Finance Minister Mathias Cormann last night told Australians they could trust the Coalition to help build a better future – a play on the Howard government’s 2004 slogan, “who do you trust on the economy”.
The Budget papers warned of global and domestic risk, with significant concerns raised about dwelling investment, sparking Mr Frydenberg to highlight Labor’s $200 billion of taxes and its controversial negative gearings and capital gains tax changes that start in January next year.
“This is the worst possible time for Labor’s housing taxes,’’ Mr Frydenberg said.
He warned Australia faced some “serious challenges” domestically and internationally, and moved to answer one of Bill Shorten’s most potent attacks - that every thing is going up except wages.
“And every one of us wants to see wages growing faster,’’ Mr Frydenberg said.
“But let me be clear, the answer to these challenges is not higher taxes.”
Net debt is expected to be 18 per cent of GDP in 2019-20 before being cut entirely over the medium term.
“The Budget is back in the black and Australia is back on track,’’ Mr Frydenberg said.
“For the first time in 12 years our national is again paying its own way.”
He said his Budget plan was one that embraced the values of all Australians.
“As we climb the mountain and reach our goal of eliminating Commonwealth net debt by 2030 or sooner, only one side of politics can do this because only one side of politics has done this.
“John Howard and Peter Costello paid off Labor’s debt.”
“The Morrison Government sets a path to do it again without increasing taxes.
“This matters because over the last year the interest bill on the national debt was $18 billion, and this was in a low interest rate environment.
“This is money that could have built 500 schools or a world-class hospital in each state and territory.”
He said Australians could not be complacent.
“The fundamentals of the Australian economy are sound but there are genuine and clear risks emerging both at home and abroad.
“The residential housing market has cooled, credit growth has eased and we are yet to see the full impact of flood and drought on the economy.”
Mr Frydenberg trumpeted the first surplus in 12 years and “the first repayment made on Labor’s debt”.
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