Australia 2017 Budget Update – Winners

Last night Treasurer Scott Morrison has handed down the budget and here are a summary how this could effect you.

First home buyers

From July 1, 2017, young people will be given the option of piggybacking on their superannuation to access a kind of super-charged savings account, which will allow savers to salary sacrifice up to $30,000 – $15,000 in a single year – from their pre-tax income to later go towards a first home deposit.

It will receive the same favourable tax treatment going in and out as superannuation. The government says when it comes time to cash out, the scheme will leave savers about 30 per cent better off overall than if they went with a typical deposit savings account.

School students

Whether you get a shiny new iPad will very much depend on which school you go to.

An extra $18.6 billion will be injected into school funding over the next decade under David Gonski’s needs-based model, originally championed by Labor.

But the model will not discriminate between public, private and Catholic schools, so 24 of the nation’s wealthiest schools will experience “negative growth” in their funding and 350 “slower growth”.

More than 9400 schools will see an uptick in funding, however, as it increases from $17.5 billion this year to $22.1 billion by 2021 and $30.6 billion by 2027.

Medicare

The Government is hitting back at Labor’s “Mediscare” campaign with a new Medicare Guarantee Fund to cover essential healthcare.

It will provide $1 billion over four years from 2017-18 for the phased unfreezing of the Medicare rebate, starting with bulk billing incentives for GPs in July 2017, moving on to specialist consultations in 2018, specialist procedures in 2019 and diagnostic imaging in 2020.

Some medicines could be cheaper as more items are listed on the Pharmaceutical Benefits Scheme and doctors are encouraged to prescribe generic brands.

There will be an extra $2.8 billion in funding for hospitals, including $730 million for Tasmania’s Mersey Hospital.

The Medical Research Future Fund will get $65.9 million towards preventive health research, clinical trials and breakthrough research investments, and $5.8 million will be provided for research into childhood cancer.

Pensioners

The Government will provide $268.9 million over two years for a one-off winter energy payment in 2016-17 of $75 to singles and $125 per couple.

The pensioner concession card will be restored to those who lost it after the pension assets test change introduced earlier this year, so seniors will regain access to state and territory based concessions that were withdrawn after the change.

The Government will also provide $5.5 billion for home support services for the elderly as Australia’s population continues to age.

But the residency requirements will be tougher, with recipients required to have 15 years of continuous Australian residence.

Small business

More tax breaks and red tape reduction are on the cards this year, with the $20,000 instant asset tax write-off introduced in the 2016 budget being extended for another year until 2018, and opened up to businesses with an annual turnover of up to $10 million. The federal government is also offering states and territories up to $300 million in exchange for reducing red tape for small businesses.

Western Sydney Airport

The federal government is holding up their promise to build Western Sydney Airport after the owners of Kingsford Smith Airport decided not to take up the opportunity.

It will provide up to $5.3 billion in equity to establish WSA Corporation Limited from 2017-18 to develop the airport. Works are expected to commence by late 2018 and airport operations by 2026, creating 20,000 jobs.

Western Australia

Yes, the state that is facing a bleak future thanks to the end of the mining boom, but it will be getting a huge influx of much-needed federal government funding.

The state will get $1.6 billion to go towards a $2.3 billion road and rail infrastructure package in partnership with the state government. This will include a combined $1.2 billion towards the METRONET rail project and $100 million for better road access to the Fiona Stanley Hospital precinct.

The federal government will also top-up WA’s GST payment by $226 million.

According to the government: “This funding is in recognition of Western Australia’s low share of GST revenue”.

But the government is also putting the pressure on the WA Government to move forward with the Perth Freight Link. It says it will provide $1.2 billion to any future WA Government which proceeds with the project.

Regional areas

Those living in regional areas will be looking forward to some improved infrastructure. Firstly, the government will provide an extra $8.4 billion in equity investment to the Australian Rail Track Corporation to deliver inland rail from Melbourne to Brisbane.

A regional growth fund will invest another $472 million in infrastructure projects that back plans to “adapt to the changes taking place in the economy”.

There will be $28.5 million to establish the Regional Investment Corporation to streamline the delivery of $4 billion in concessional loans. This includes the $2 billion National Water Infrastructure Loan Facility and the $2 billion Farm Business Concessional Loan Scheme.

Tourism operators in Queensland

The government will provide $5 million in 2016-17 to help the Queensland tourism industry recover from the impact of Tropical Cyclone Debbie.

Funding of $3.5 million will be provided to the Queensland Government to fund tourism projects and Tourism Australia will undertake media advertising to promote the continued availability of tourist venues in North Queensland at a cost of $500,000.

Tourism Australia will also reprioritise $1 million of existing marketing investment funds to focus its current international coastal and aquatic campaign on Queensland destinations.

People worried about their gas bills

The government seems to be focused on increasing gas production to help keep power prices down. It is providing $86.3 million over four years from 2017-18 towards assessing three possible onshore unconventional gas sites and identifying potential environmental impacts.

It includes providing $28.7 million to encourage and accelerate responsible development of onshore gas for the domestic market.

There will also be a study to identify possible improvements to the National Gas Services Bulletin Board so users can view real-time data about gas availability.

Constraints on increase gas supply on the east coast of Australia, and of current and potential gas production in offshore South Eastern Australia will be examined.

The Australian Competition and Consumer Commission will be given $6.6 million over three years from 2017-18 to establish a monitoring regime for the gas market, meaning industry will have to provide more information about factors that impact supply and pricing.

Andrew Law
General Manager
m: 0411 625 998
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