“The budget is back in the black and Australia is back on track!” said Australian Treasurer Josh Frydenberg on Tuesday. He then went on to announce the first budget, in more than a decade, to receive a surplus of $7.1 billion.
Opposition Labor leader Bill Shorten presented his response to the Coalition’s budget on Thursday. He unveiled his own proposals in response. Here is a focus on what both parties are offering to taxpayers.
The Coalition offered more than 10 million low and middle-income earners will receive a tax offset of up to $1,080 per person for earners between $48000 and $90000 and $2,160 for dual-income earners.
Mr Shorten’s most dramatic line in his reply to the Budget was in reference to this. “This isn’t a tax plan, it’s a ticking debt bomb,” he said, but he also committed to supporting the government’s plan to increase the low- and middle-income tax offset and increasing the offset for those who fall bellow that bracket.
In an effort to neutralise the Coalition’s traditional strength on economic management and the $302 billion the government has offered in personal tax cuts, Mr Shorten pledged to better this by offering more personal tax cuts in the short term for lower-income earners.
Mr Shorten said that it is unfair that someone earning $50,000 could pay the same amount of tax as someone earning $200,000. “It is neither fair nor responsible to lock in these billions of dollars of tax giveaways, disproportionately flowing to a relative few, and so far into the future,” he said.
He made the commitment to match or beat the government’s tax cuts for 10 million workers.
The Coalition criticised Labor’s plan as it would impose $200 billion in extra taxes on the Australian economy, and higher taxes for those earning above $45,000, ie, most Australians.
Australia’s property markets are facing a slump. Lending to housing investors is down by 30 per cent since mid-2017 and the value of loans have fallen sharply, according to the Master Builders of Australia. The property industry hopes for a plan to make property more affordable for first-time buyers but also boost the construction of new housing.
The pressure was on for the Coalition to deliver its answer for addressing housing affordability following Labor’s proposal of negative gearing reforms if it wins the election. While it offered few incentives to directly tackle housing affordability, hence leaving the market forces to deal with the conditions themselves, it did offer initiatives that would impact home buyers and encourage purchases outside of major cities with new rail and road infrastructures to make major job hubs more accessible to residents of cheaper housing markets.
Meanwhile, Labor reaffirmed its commitment to restrict negative gearing to investors who purchased new housing if elected. It wants to scale back on generous tax perks and introduce its housing tax policy. Mr Shorten also made reference to his party’s plans to support the build-to-rent sector where apartment towers could be owned by superannuation funds.
The Coalition stated that $7.7 billion would be spent from 2022-2023 for better access to MRI scans for patients with breast cancer, and $1.4 billion over five years from 2017-2018 for new Pharmaceutical Benefits Scheme listings, including medicines to treat spinal muscular atrophy, breast cancer, refractory multiple myeloma, relapsing-remitting multiple sclerosis and a new medicine to prevent HIV.
Labor came back with promises of a $2.3 billion Medicare Cancer plan to cover out-of-pocket medical costs. He described the terrible scourge of cancer, stating that Australia has the highest rates of skin cancer with most people paying over $5,000 for the first two years of their treatment. “One in four women diagnosed with breast cancer pay over $10,000 for two years of scans and tests and someone with prostate cancer is paying more than $18,000. If you are in stage 4 cancer you have to quit work, so your finances are already under horrendous strain. If you live in the regions with the added costs of travel and accommodation,” he said.
The Doctors Reform Society responded to the announcement by stating that it is wrong for Labor to use cancer as the centrepiece of his health policy. They also pointed to all the other complications that people die from that they felt that Labor has not addressed.
Elderly and the disabled
There will be 10,000 new home care packages to be funded, with more financial support for residential care for the elderly by the Coalition. Payments for $75 for singles and $125 for couples will go to 2.4 million pensioners, 744,000 disability pensioners, 280,000 carers, 242,000 single parents and 225,000 veterans and their dependents – provided legislation is passed by 1 July.
Welfare recipients are the losers of the coalition’s budget. $2.1 billion will be saved in welfare payments through automating the reporting of employment income. The income of those who receive Centrelink payments and work part time will be scrutinised. The government things this will save the commonwealth $2.1 billion over five years.
The disability scheme is already one year behind schedule with a $1.6 billion pool of unspent money. This is expected to climb to almost $25 billion in just four years.
The Australian Council of Social Services blasted the Coalition for excluding people on the unemployment benefit, Newstart from the one-off payment.
On its part, Labor has committed itself to lifting the cap on NDIS, which will come as welcome news to disabled people facing crushing costs of care.
Mr Frydenberg unveiled a $525 million skills package that will create 80,000 apprenticeship positions which will get $2000 each.
Bill Shorten almost doubled the number of new apprenticeships on Thursday. He said that $440 million would be spend, including $330 million to deliver 150,000 apprenticeships subsidies in areas where there are skills shortages.
The centrepiece of the Coalition’s package is $200 million for 80,000 apprenticeships by doubling incentives to employers ($8000 per placement).
TAFE would get $200 million for the future fund to expand its course offerings, and re-establish its facilities in regional communities and growing areas.
The Master Builders of Australia welcomed Labor’s commitment to help train these young people and add another 10,000 young Australians to its pre-apprenticeship program. Nonetheless, the group would like more of a focus and investment in not-for-profit registered training organisations as well as TAFE.
The Coalition has increased the instant asset write-off from $25,000 to $30,000 which will now be available to companies with a turnover of up to $50 million. Eligibility for the scheme will cover businesses with a turnover of up to $50 million, up from $10 million.
Small business owners waiting to hear Labor’s alternative were left with vagueness because while Mr Shorten offered bipartison support for the budget surplus there were measures that would not be seen in a positive light by business owners. His intent to reverse the Coalition’s decision to remove public holiday and retail rates for workers in the first 100 days of being elected is something that would not please business owners.
The truth, however, that their lot in life would depend upon the economy doing well, as businesses – particularly small businesses – profit from the general well-being of the economy.
Potential migrants and refugees
Mr Frydenberg’s budget figures show the government’s population plan will not reduce, but will increase before tailing off – especially due to university students and those on temporary visas. In his post-budget address, he said that “we have grown much faster than was originally forecast, and I think it’s fair to say that governments of all persuasions have failed to properly plan for that population change. That is now changing.”
The Coalition plans to curb the flow by making newly-arrived refugees wait 12 months before they can have access to unemployment. This will save the state $77 million over four years.
Potential migrants are also being discouraged as there will be a reduction to the annual migration cap from 190,000 to 160,000 people.
The ABC and SBS will get an extra $73.3 million over three years, with most of that invested into boosting news in regional areas which means that they will not get any extra funding. While farmers will benefit, the multicultural community may be left in the cold. The National Ethnic and Multicultural Broadcasters’ Council (NEMBC) had made a strong submission to the federal government recently for additional funding for ethnic and multicultural community broadcasters. It claims that the ethnic community broadcasting sector has been denied almost $1 million funding since the Liberal government annual indexation freeze from 2013 to 2020.