Budgets are a good opportunities for governments to reset their agendas, and it appears that the Turnbull government is making the most of it, with the final elements from the 2014 budget now fully extinguished.
The first budget after an election is usually a painful one for the country, with the government of the day making cuts all over the place. This budget seems to resemble an election budget, as there is quite a bit of spending and hardly any cuts.
Australia is expected to enter its 27th year of continuous growth, but it will be a little slower than expected at 2.75% of gross domestic product (GDP). Inflation will slightly increase from 2 to 2.5% next year. Tropical Cyclone Debbie is expected to slow growth slightly before the end of the year.
Australia’s debt is a becoming a big problem, as it now sits at 29.4 billion dollars (net), with a surplus pencilled in for the year 2021.
The gross deficit figure currently sits at 480 billion dollars and is on track to surpass the half a trillion-dollar mark later this year.
In delivering his second budget, Scott Morrison says this is a ‘practical budget, focused on growth’. Here’s a quick snapshot:
- The four-year Medicare rebate freeze for GP’s and other specialists has been scrapped.
- First home buyers will be allowed to salary sacrifice pre-tax income into their superannuation to grow a house deposit.
- The government will spend 75 billion dollars over the next 10 years on infrastructure projects.
- The big four banks will face a new levy ‘to assist with budget repair, to the tune of 6 billion dollars.
- The NDIS program will be fully funded via a half a percentage increase to the Medicare levy.
Over the course of the night we will release more information on specific areas at politicsinaparagraph.com/budget
Stick to our Facebook page for more information as it is released.
Ok, it’s time to talk about Donald Trump.
The next couple of posts will be crucial in understanding what’s going on in the US right now.
Pretty serious allegations have been floating around that members of his own campaign worked with Russian officials to interfere with the 2016 presidential election.
We’re not talking about fraudulent voting – rather a combination of Russia writing fake news stories that were pro Trump, and several hacking attacks – most notably the email servers of the Democratic Party – his political rival.
With several alleged connections and businesses interests inside the White House, the accusation is that Trump has lost the ability to carry out his duties for the nation without interference from Russian contacts. Trump’s former National Security adviser is one of the main suspects, who Trump fired a few weeks ago after enormous pressure to do so.
The F.B.I are acutely aware that the election interference issue requires investigation. James Comey was the head of the F.B.I up until last week – he was fired by Trump just days after Comey said that the F.B.I would continue investigating.
This morning, this got a whole lot more serious – The United States Justice Department has appointed a former director of the F.B.I to continue the investigation into Russian interference. Robert Muller served as director during the Bush and Obama administrations and is widely respected across both sides of the aisle.
The sacking of F.B.I director James Comey was a clear sign that something is not right. Let’s see where the investigation goes.
The government has again reversed a key 2014 budget decision, this time restoring the cuts directed to community legal centres. The government will restore 39 million dollars to community legal centres and 16.7 million dollars to Aboriginal and Torres Strait Islander legal services.
The government will also boost domestic violence funding with an extra 3.4 million dollars over two years to continue the work of domestic violence legal units.
One of the bigger programs in the Attorney General’s spending program is a 12.7 million dollar trial to establish new forums within the family law courts. ‘Parent Management Hearings’ will be introduced with the aim of providing a fast and informal structure to resolve ‘non-adversarial’ disputes between families within the court system.
2.3 million dollars will be provided to Australian victims of terrorism events overseas in a rolling fund designed return them to daily life and recover the events. This includes a small number of Australians who were caught up in the attacks in London and Berlin in 2016. The fund will operate for the next four years.
Energy supply has been a major issue that the government has argued over in the last several months, and the budget confirms they will continue this inter next year. The government has commissioned the ACCC to investigate why gas and electricity prices are so high. They will report back later in the year.
To take the heat off consumers, the government will provide on off payments to those on pensions to assist with bill shock: $75 for singles and $125 for couples.
The biggest announcement surrounding energy is Snowy 2.0. The government is seeking to buy back the New South Wales and Victorian shares of the Snowy Hydro Electricity scheme, in order to regain full control of the project, in preparation for a 2000 megawatt increase to its generation capacity. But the states won’t let go of their share for free! This is a major project that Malcolm Turnbull would like to begin – it will cost him dearly.
The government also continues to provide loans to businesses that invest in clean energy production, to the tune of more than 3 billion dollars over 4 years.
There’re also investigating the possibility of constructing new gas pipe-lines for South Australia, with the energy issues of the state in the last couple of months becoming a real political issue.
The government will spend more than 37.3 billion dollars over the next four years on early childhood education. A central focus is on keeping fees low, so the government will introduce an hourly rate cap on all centres.
In addition to this, 428 million dollars has been made available to support children who come from low socioeconomic backgrounds, allowing them to access preschool services, when it would not have been possible.
The government’s recently passed ‘Jobs for families’ childcare package encourages parents to return to the workforce by providing subsidies that ensure there is a financial benefit for parents to re-enter the workforce.
Pre-school fees have the capacity to swallow up the earnings of parents, making the task of going to work redundant.
Immigration and border protection will see the creation of several new visas. As we already know, the 547 visa will be abolished – the government will establish a new short and medium ‘temporary skill shortage visa’. Fees will rise for these applications, raising around 50 million dollars.
The government will introduce a new temporary sponsored parent visa. Beginning in November, it will allow parents of Australian citizens to stay in Australia for three to five years.
The government is also on track to expand Australia’s Humanitarian Programme from 16 thousand to 18 thousand places per year. This will have a positive effect on the budget, earning more than 20 million dollars of revenue over the next four years.
Smokers will continue to be face tax increases, this time on roll your own tobacco and cigars. Over the next four years the tax is expected to raise more than 400 million dollars extra. When questioned on this, Finance Minister Mattias Cormann suggested those who don’t like the tax ‘are welcome to stop smoking’.
Concessional loans will are again at the centrepiece of the agriculture and water measures for this budget.
For the last few years the government has provided concessional loans to the regions to fund water and agriculture projects. This budget allocates 4 billion dollars to water and farm loans to continue to drive investment.
The agriculture sector in NSW is in celebration mode following the news that a new inland freight link will be constructed. Allowing farmers to get their product faster to the export dock, the rail link will span from Melbourne to Brisbane.
The 8 billion dollar project is expected to begin construction before the end of the year.
The regions of Australia are big winners from this budget with major infrastructure projects and fresh investment.
At the heart of this package is a 472 million dollar program to assist the bush in infrastructure projects, which includes 200 million dollars for the ‘building better regions’ fund.
In addition to this, the government will spend 24 million dollars in rural and regional enterprise scholarships and improve mental health services to the bush with a 9.1 million dollar investment through the telehealth service.
More than 8.4 billion dollars will be provided for a new inland rail project spanning from Melbourne to Brisbane.
As well as these measures, the government has begun the process of investigating the outsourcing of Commonwealth agencies to more rural locations. An example of this is the pesticides authority moving to Barnaby Joyce’s electorate in Armidale – it was previously located in Canberra.
There are various employment measures in the budget, but the major change to note is a new levy that will be applied to businesses who want to import a worker to Australia. The $5,000 levy will go towards training and development programs for apprentices.
The government will provide more than 1.5 billion dollars for training in the next financial year (most of this will go to the states), enabling more than 300,000 apprentices to be trained via the new ‘skilling Australia fund’.
The budget has also confirmed the abolition of the 457 visa, with a new class of visa known as the ‘temporary skill shortage visa’.
The Australian Federal Police are big winners in this budget, with a funding boost that will see an additional 300 staff join the organisation in several different roles including negotiators, and bomb and forensic specialists.
The funding boost is more than 300 million dollars, and restores a cut to the organisation that was made in 2014 by three quarters. There is also an increase of funding to the Australian spy service ASIO, however no public detail is available as to what that funding will be used for.
The foreign aid budget has been gutted once again. Aid and development spending is the lowest it has ever been in Australia, despite the goal of aid funding rising in line with CPI.
The budget has confirmed that aid funding has been frozen altogether for two years from 2018 to 2020.
The 303 million dollars in foreign aid that has been frozen will be diverted to the Australian Federal Police for ongoing recruitment and training of officers.