Yesterday the Australian Government released the Federal Budget for 2017/18 with Australia’s Treasurer, Scott Morrison, delivering the budget in a 30-minute address to parliament.
In his short speech, Mr Morrison discussed measures and funding plans in relation to small business, skilled migration, healthcare, education, cost of living, foreign investment, housing affordability, taxation, and welfare.
Below we have summarized some of the key changes being introduced in the 2017/18 Budget.
The five major banks (ANZ, Commonwealth, Maqcuarie, NAB and Westpac) will have to pay a 0.06% levy (a new tax) from the 1st of July 2017.
This is expected to boost the budget bottom line by $6.2B over the forward estimates.
Economists have suggested that the introduction of the levy has the potential to impact the banks' share prices.
Foreign property investors will be subject to new penalties for properties left vacant, as well as increased application fees. Foreign property owners will be forced to pay capital gains tax when they sell.
In addition to this developers will be instructed to sell no more than 50% of their developments to foreign investors.
The Government has tackled the issue of housing affordability by introducing the First Home Super Saver.
Aspiring first home buyers will be able to make voluntary superannuation contributions of up to $30,000 ($15,000 per year) into their super fund for their first home deposit.
Withdrawals will be taxed at a lower rate and both members of a couple can take advantage of the scheme.
Small businesses will be able to continue benefitting from instant tax offsets which are set to continue for another year.
Some small businesses may be affected by a new foreign worker levy where they are required to pay up to $1,800 each year for every employee on a temporary working visa and a one off levy for workers on a permanent skilled visa.
The government has struck a deal with Medicines Australia to reduce the price on certain pharmaceuticals and has added medicines to treat heart conditions and schizophrenia to the PBS.
Costs incurred by patients should be lower with the Government lifting the freeze on Medicare rebates and improving the incentives on offer for GPs to bulk bill.
Welfare recipients will be subject to stricter requirements and penalties. All Newstart and Sickness Allowance recipients will be moved to the new JobSeeker payment. Failure to comply with requirements such as attending interviews will result in penalties being applied.
Five thousand new welfare recipients will be subject to drug testing under a new trial. Failing a drug test will result in the recipient being given a cashless debit card which they can only use for vital living expenses.
There will be more Government funding per student for most schools with Commonwealth funding of $18.6B over 10 years.
University students are set to face higher fees and will also have to start repaying their debts sooner. At the moment, once you earn over $55,000 a year you are required to start making repayments towards your HECS debt. From July next year this income level will be reduced to $42,000 a year.
For more details on the Federal Budget 2017/18 you can visit the Government website http://www.budget.gov.au/.
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