Here’s Everything You Need To Know About Tonight’s Federal Budget
Australia's tax system is getting a big, US-style reshuffle...
Well, the government wasn’t kidding when it described this year’s budget as a “baby boomer budget”. High income earners are getting an enormous tax cut over the next few years, aged care funding is going up, and climate change was…not a priority.
If you can’t be bothered to read the whole thing (can’t blame you), here’s your guide to some of the big stuff that was just announced.
A Massive Tax Cut For Higher Income Earners
First up, this budget features a dramatic flattening of the tax system. The government plans to remove a tax bracket over the next seven years, meaning that by 2024, someone earning $41,000 a year will be paying the same tax rate as someone earning $200,000.
— Adam Bandt (@AdamBandt) May 8, 2018
To put that in perspective, here’s how it works at the moment: people earning salaries below $87,000 pay a tax rate of 32.5%, while people on incomes from $87,001-$180,000 pay 37.5%, and people earning more than $180,000 pay even more. This is called a progressive tax system, because as people earn more money, the amount of tax they pay progresses. It’s widely considered to be a really good idea, because rich people can afford to pay more tax.
The government’s new policy will totally remove that 37.5% bracket, though, meaning that everyone who currently pays that will instead pay a lower rate of 32.5%. Basically, people who earn more than $90,000 a year are getting a tax cut. The only saving grace is that it won’t happen for at least seven years.
— Adam Bandt (@AdamBandt) May 8, 2018
A Small Tax Cut For Low Income Earners
Earn less than $87,000? Congratulations, then, because you’re also getting tax cut. Unlike the tax cut that rich people are getting, however, this one is tiny — it’ll work out to $10.50 a week at most. Not nothing, to be sure, but not huge.
As Tanya Plibersek put it, “it looks like tonight’s tax cut won’t be a hamburger and a milkshake. You’ll have to take your pick — it’ll be a hamburger or a milkshake.”
The people who’ll be receiving the tax cut aren’t too pleased either. Lots of them are responding by telling the government to #keepmytendollars and put it towards something useful, like raising Newstart, or funding the NDIS.
The Robodebt Program Is Here To Stay
Despite being slammed by experts and the people it affected, the government is keeping the hugely flawed robodebt program. You know, the one that involved threatening, computer-generated messages being sent to hundreds of people who had actually done nothing wrong.
That’s not all. From 2019, the government will be able to match welfare recipients’ court-imposed fines to their Centrelink accounts and deduct the cost of outstanding fines from Centrelink payments. Buzzfeed has a good explainer on how that will work, and it’s pretty chilling.
More Funding For Mental Health Services And Aged Care
The government has managed a couple of good things in this budget, and one of these is extra funding for mental health services. The government has committed $338 million in mental health funding, including a $33 million boost for Lifeline, and $82.5 million for mental health services in aged care facilities.
There’s also a huge funding boost to aged care, with $1.6 billion allocated for an additional 14,000 high-level home care packages, and $61.7 million to improve the My Aged Care website.
More Cuts To The ABC
You’d be forgiven for missing the fact that there’ll be more cuts to the ABC, given that the Budget refers to it as merely “pausing indexation of the ABC’s operational funding”.
Indexation is what keeps that funding in proportion with inflation, though — without it, the ABC will effectively lose $83.7m over three years. And what was the justification for doing this? It’s “in order to ensure the ABC continues to find back-office efficiencies”, apparently.
Not Much Mention Of The Environment Or The Pressing Threat Of Climate Change
It seemed like this was going to be an okay year as far as environmental policy goes, when the government announced half a billion dollars would go towards cleaning up the Great Barrier Reef.
— GetUp! (@GetUp) May 8, 2018
Unfortunately, though, that was kind of it for environmental policy. In fact, ScoMo was pretty clear that the government will not commit to a 50% renewable energy target, “because that will only put electricity prices up”.
Rather, the government is still talking about a “
— Australia Institute (@TheAusInstitute) May 8, 2018
Money For Infrastructure
There’s good news for anyone who is sick of getting stuck in traffic on the way to work — the government has announced a $1 billion “urban congestion fund”, to tackle traffic jams.
There’s also a heap of money for infrastructure projects, an airport rail line in Melbourne, a freight line in Sydney, new bridges in Tassie, and better, wider roads in Brisbane, Perth and Sa.