In foreshadowing the Budget, Treasurer Joe Hockey stated that he would deliver a growth Budget but that all Australians would be expected to contribute. With a mix of increased tax measures and reductions in Government spending, this Budget aims to reduce the current deficit from $49.9 billion to $29.8 billion next year and to $2.8 billion by 2017/2018.
To that end, Tuesday night’s 2014-2015 Budget introduced a number of initiatives summarised below:
- The introduction of a Temporary Budget Repair Levy on incomes over $180,000 for the three years from 2014-15;
- Requiring young people to be “earning, learning or participating in Work for the Dole”;
- Tightening the eligibility for Family Tax Benefit Part B (FTB-B). Low income single parents will be assisted with a new allowance of $750 per annum for each child aged 6 to 12;
- Indexing pensions to the CPI, rather than wages, from September 2017;
- Increase to the pension age to 67 by 1 July 2023, and further increasing the Age Pension Age to 70 by 1 July 2035;
- Indexation of many payments and programmes will be temporarily paused including: eligibility thresholds for Family Tax Benefit and Newstart; thresholds for the Medicare Levy Surcharge, Private Health Insurance Rebate and most Medicare Benefits Schedule fees; Official Development Assistance funding; Local Government Financial Assistance Grants; and 112 government grant programmes;
- A reduction in the growth in public hospitals and education funding and a reduction in some Commonwealth payments, in a move to “make the States more accountable for spending and delivery of services”;
- Reintroduction of indexation of the fuel excise from 1 August 2014 to “establish a sustainable source of future-productivity enhancing road funding”.