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The key numbers: the saves, the spends, the new initiatives

The increased revenue, the spending cuts, the new initiatives: here are the key measures from Joe Hockey’s first budget as Treasurer …

Here are the key measures in the budget …

Increased revenue:

  • The much-anticipated deficit levy: as expected, there’ll be a rise in income tax rates for taxable incomes above $180,000 for 2014-17 that will raise $3.1 billion over the forward estimates (all that political pain for $3 billion?). Individuals on $180,000 and above will pay an additional 2% of income above $180,000.
  • Fuel excise indexation will be reintroduced from August, raising $2.2 billion over the forward estimates. The amount raised each year by additional indexation will form the minimum to be spent on roads.

Spending cuts:

  • A $7 co-payment for GP visits from 1 January 2015. The government cuts payments to GPs by $5 a service, with the saving notionally directed to a new Medical Research Fund.
  • Increases in foreign aid in previous budgets (and until recently part of the bipartisan target of 0.5% of Gross National Income going on aid) will be scrapped, meaning a cut to foreign aid of $8 billion over the next five years, with aid frozen at current levels and then only indexed according to domestic inflation.
  • Lowering the threshold for repayment of higher education HELP loans to $50,638 from 2016 and increasing the interest rates, generating $3 billion across the forward estimates.
  • Freezing Family Tax Benefit payments for two years (saving around $700 million a year) and reducing access to Family Tax Benefit B to families with children under six and earning under $100,000 (saves $3 billion).
  • Reducing access to Pensioners and Seniors Card Holders ($300 million a year).
  • Pausing indexation of a wide range of governments grants.
  • Confirmation that the Direct Action climate plan will be limited to $2.55 billion over 10 years, rather than the original $10 billion.
  • A 1% efficiency dividend for both the ABC and SBS as a “down-payment” on future cuts “being considered by the government and the public broadcasters over coming months”.
  • A rise in the PBS co-payment of $5.

New spending initiatives or tax cuts:

  • As promised by the Coalition, a cut in the corporate tax rate by 1.5% points for small and medium firms from 1 July 2015.
  • An “Asset Recycling Initiative” — $5 billion to encourage states to sell assets and reinvest in infrastructure.
  • A claimed $3.7 billion infrastructure package for roads investment, aimed to roll out immediately. Labor claims, with considerable evidence, that many of the projects are Labor-era projects re-announced and already funded.
  • A bring-forward of Defence capital spending of $1.5 billion, offset by a later $520 million delay in out-year spending.
  • A Medical Research Fund to be built up from health portfolio savings, advertised as a “$20 billion fund” but it won’t reach that level for a generation: the Commonwealth’s initial investment will be $1 billion over four years.
  • An extra $250 million for the School Chaplaincy program over five years, with “simplified reporting and administrative requirements”.

Other initiatives:

  • A rise in the pension age to 70 by 2035.
  • Indexation of pensions (aged, carers) according to CPI, not wages growth, from 2017.
  • Jobseekers up to 30 prevented from accessing Newstart or Youth Allowance for a six month “waiting period”, then limited to six months before being removed from income support, before being permitted back on after a further six months.
  • Privatisation of Australian Hearing, Defence Housing Australia, the Australian Securities and Investment Commission registry function (some might suggest ASIC in its entirety could be privatised given the extent of industry capture) and the Royal Australian Mint.
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  • 1
    Matt Hardin
    Posted Tuesday, 13 May 2014 at 10:27 pm | Permalink

    So with youth uneloyment at 12.5% what are these young people supposed to do? This budget is almost criminal in its effects. Any Liberal with a social conscience should quit the party first thing tomorrow morning.

  • 2
    pinkocommierat
    Posted Tuesday, 13 May 2014 at 11:05 pm | Permalink

    Hi, Bernard, when I heard the Treasurer’s speech I took it to mean an extra 16,500 public servants would go over the next three years, meaning 5,500 per annum until the end of 2016-17. Could you or anybody else out there clarify this? Presumably any losses would include natural attrition, but in the context of a recruitment freeze and downsizing, the churn rage must surely be lower than usual.

  • 3
    klewso
    Posted Tuesday, 13 May 2014 at 11:54 pm | Permalink

    The co-payment, paper-clipped to “research”?
    …… So, if Labor and the rest of the “Opposition” don’t support it, this Limited News Party government can get some political mileage labelling them “recalcitrant/ant-research/medical sceptics”?
    Nice cosh ….. sorry, touch.

  • 4
    Chris Hartwell
    Posted Wednesday, 14 May 2014 at 8:38 am | Permalink

    @klewso - oh, it’s brilliant politicking, and the majority of the electorate will see opposing it as opposing medical research. But as Croakey shows, Prevention is indeed better than The Cure. Costs less too.

  • 5
    zut alors
    Posted Wednesday, 14 May 2014 at 11:50 am | Permalink

    What brilliant policy: $$$$ for medical research while stripping $147M from the CSIRO.

  • 6
    isobel deane
    Posted Wednesday, 14 May 2014 at 11:58 am | Permalink

    No information in this article on what has happened to Indigenous funding? Who cares, right?

  • 7
    CML
    Posted Wednesday, 14 May 2014 at 12:16 pm | Permalink

    This from our allocated pension fund this morning:

    Budget repair levy of 2% for those earning over $180,000 - calculated only on income over this amount”.

    So, tax on the first $180,000 remains the same? How does that equate to $3.1 billion to be raised (and over what time-frame?)
    Sounds like a Claytons tax rise to me!! I hasten to add that I am NOT in this tax bracket!!!!!!

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