2012 Budget impacts
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8th May, 2012 ECONOMY New spending of $22 billion, $39 billion in new taxes, $34 billion of expenditure cuts underpin the Budget No tax cuts in Budget for the first time in eight years After four Budget deficits totalling $174 billion, the Treasurer promises a $1.5 billion surplus in 2012-13 At least $7 billion of expenditure moved into 2010-11 financial year to create artificial surplus including: $1.1 billion in early payments to local government, $1.4 billion disaster repairs to Queensland, $1.1 carbon tax prepayment, and $1 billion to coal fired power stations. Six major spending programs begin after the end of this financial year but 22 of 24 savings measures begin this year 2011-12 Budget deficit blows out from $22.6 billion to over $44 billion $143.2 billion net Government debt for 2012-13, rising to $145 billion in 2013-14 and credit limit increased by $50 billion to $300 billion. Labor will borrow $135 million every day to pay its bills Unemployment forecast to rise to 5.5 per cent and inflation to 3.25 per cent. Terms of trade to fall by 5.75%, 4227 public service jobs axed rising to 12,000 2014-15. Public service still 20,000 places larger under Labor at 262,000 HOUSEHOLDS, FAMILIES AND PENSIONERS Income tax free threshold increased to $18,200 but marginal tax rates increased from 15 per cent to 19 per cent and 30 per cent to 33 per cent As part of "spending the boom" strategy, new payment of up to $210 singles / $350 for couples for unemployed, students, people with young children or on income support Increase to Family Tax Benefit Part A of between $300 and $600 per year but Education Tax Refund scrapped. Ten most benefitted electorates all held by Labor Promised tax concession on 50 per cent of interest earned up to $1,000 scrapped (saving $3 billion) New means tested Schoolkids Bonus of $410 for primary school aged children and $820 for high school aged children Only 50 cigarettes can be bought duty free (down from 250) earning $600 million over four years Single Age Pensioners receive an extra $338 and couples $255 each per annum for carbon tax price rises Age Pensioners and Seniors Health Card holders lose supplement payments after six weeks overseas (was 13 weeks) Promised simplified tax returns and standard deduction axed Living Away From Home Allowance tax concessions tightened saving $1.2 billion Individuals earning more than $300,000 per annum to receive 15% concession on marginal tax rate for superannuation contributions (down from 30%) Promised increase in concessional contributions rate for over 50s from $25,000 to $50,000 for people with low superannuation balances deferred from 1-7-2012 to 1-7-2014 (saving $1.5 billion over four years) Mature Age Worker Tax Offset axed for those born after 1-7-1957 Parenting payments cut saving $685 million over four years CARBON TAX & ENVIRONMENT Carbon tax forecast to collect $36 billion over four years New $36 million carbon tax advertising campaign, which fails to mention carbon tax $405 million Green Buildings program axed $20 million slashed from Caring for Our Country program Solar Hot Water Initiative cancelled Caring for Our Country funding cut with just $2.2 billion available for conservation programs over the next four years HEALTH Part pensioners and self funded retirees to pay more for their aged care Medicare safety net threshold increased to $5,000 for higher income earners and tax concession reduced to 10 cents in the dollar ($370 million saved $33.3 million cut from Health and Hospitals Fund $83.5 million cut over four years from GP services including cervical cancer screening, diabetes care and immunisations $183.9 million Telehealth Support Initiative scrapped Private Health Insurance Rebates cut for higher income families National Disability Insurance Scheme receives $1 billion over four years for trials - less than the $3.9 billion recommended by the Productivity Commission. Only $84 million will be available in 2012-13. The NDIS is expected to cost $8 billion per year when it is implemented VETERANS, DEFENCE & NATIONAL SECURITY Defence budget slashed by $5.5 billion over four years to lowest share of GDP since 1938 $85.4 million cut to Veterans Affairs aged care funding $55 million cut to customs and quarantine services at international airports and cancellation of aircraft surveillance flights across northern Australia Australian Federal Police budget cut by $70 million BUSINESS Promised company tax cuts scrapped ($4.7 billion) Tax write off for eligible assets under $6,500 for some small businesses Passenger Movement Charge increased by $8 raising $610 million Offset losses of up to $1 million can be written off against previous profits but less than 5% of businesses will benefit EDUCATION & EMPLOYMENT $147 million cut from Community Development Employment Program On the job training and support programs cut by $16.4 million Maths and Science concessional fees for university students to be abolished saving $315 million INFRASTRUCTURE, REGIONAL & AGRICULTURE Another 111 jobs cut from Agriculture Department and 60 jobs from Regional Development, Local Government and the Arts Road funding slashed from $6.2 billion to just $2.6 billion - lower than in the last year of the Howard Government $100 million slashed from the Bruce Highway Cooroy to Curra four lane upgrade and no new projects announced on this section of Highway NSW Road funding halved to $1.2 billion, Queensland cut from $1.6 billion to $879 million Gillard Government demands that NSW match $3.6 billion funding offer for Pacific Highway even though no matching contributions were required of the State Government when Labor was in office $158 million taken from Western Highway upgrades in Victoria, to be spent on Morebank Intermodal Terminal in NSW - even though the private sector planned to build the terminal at their own cost $700 million increase to the heavy vehicle user charges over four years Airports to be charged for Australian Federal Police presence Promoting Regional Living Program axed even though it had never been advertised or guidelines prepared ($10.9 million saved) $380 million for a new Quarantine Centre in Melbourne LOCAL GOVERNMENT Labor advances $1.1 billion of personal income tax share to local government from 2012-13 to 2011-12 to help achieve its $1.5 billion surplus BORDER PROTECTION Management of asylum seekers blows out by a further $1.7 billion Budget for intercepting asylum seeker boats reduced by $7.3 million (and a further $26 million in 2012-13) Border protection budgeted to fall from $1.2 billion in 2010-11 to $800 million by 2014-15 FOREIGN AFFAIRS Foreign aid and expenditure cut by $3 billion over four years but grants to aid organisations increased |
