This year’s federal budget is expected to be far different to the ‘budget repair job’ of last year. Pension changes, new taxes to crackdown on multinational tax avoidance, GST on online sales, further cuts to foreign aid, cuts to health and company tax rate cuts for small businesses are just some of the expected announcements in tonight’s budget.
Announced on Thursday, plans to change the way in which pensions are indexed have been dumped and replaced by a proposal which will see wealthier pensioners lose their Age Pensions. The asset thresholds will be lowered and the pension taper rate changed. 170,000 pensioners with modest assets will be about $30 per fortnight better off.
The ‘engine room of the economy’, two million small businesses that employ over four million workers Australia-wide will benefit from a tax cut of at least 1.5% with the government hoping to win over this sector.
New legislation will be announced in this year’s budget to deal with 30 companies that are diverting profits offshore. Treasurer Joe Hockey has also announced plans to charge GST on transactions by companies such as Netflix and Amazon that provide online products such as television streaming services or the sale of ebooks.
Tonight I will hand down #Budget2015 – it will help to create jobs, build economic growth and create opportunity for all Australians
— Joe Hockey (@JoeHockey) May 11, 2015
The Federal Budget being presented this evening is expected to be very different to the 2014/15 budget, which was labelled by some as the harshest budget in more than 20 years. After failing over the past year to push through the Senate several key policies that were introduced in the last budget, it’s no surprise that the government has back flipped on many unpopular issues, and has started to focus on the bigger picture.
Over the past three months, there has been a noticeable shift in the attitude of the government, away from targeting the poorest and most vulnerable, with a greater focus on boosting the economy. The large number of policies already announced suggesting that we aren’t in for many shocks. However, we can always still expect a few hidden surprises in the details.
One thing has been made crystal clear from all the talk surrounding the budget this year – don’t expect to see a budget surplus. In fact, if the figures from last week’s Deloitte Access Economics’ budget analysis are correct, we could be in for a $45 billion deficit due to flat wage growth and iron ore prices as low as $35 a tonne.
What are you wanting or expecting from this budget? Will the success of this budget keep Tony Abbott in power to contest the next election? Will it save the Treasurer Joe Hockey? Are you feeling more comfortable with the approach of the Federal Government compared to 12-months ago?