Budget 2015-16 Round-Up

WINNER: Small business owners

By far the biggest winner in this budget is small business, which has been given a generous package of tax breaks, red tape reductions and concessions worth $5.5 billion. One big sweetener for small enterprises is being able to claim unlimited tax deductions for items under $20,000. If you’re starting a bakery, for example, and buy $17,250 worth of new equipment, you will be $4140 better off come tax time.

WINNER: Working parents

Working parents earning between $65,000 and $170,000 will be about $30 a week better off after the Government resolved to simplify childcare subsidies. The subsidy will be paid directly to childcare providers, meaning fewer upfront expenses for parents.

WINNER: Sick people

Sweeping changes to the Pharmaceutical Benefits Scheme will see the Government pay generic drug makers much less for some medicines, which should lead to significant price drops. Some over-the-counter medications will be dropped from the PBS completely, while $1.6 billion in new and expensive medicines will be funded for the first time. The Medical Research Future Fund is expected to pay out $400 million over the next four years to researchers.

WINNER: Farmers

Struggling farmers will receive $300 million in drought assistance to help them through tough times. Farmers will also get an immediate tax deduction on investments in water facilities and new fencing, as well as a three-year depreciation allowance for money spent on fodder storage assets.

WINNER: The young ones

Preschoolers and their parents will benefit from an $843 million kitty in 2016 and 2017 for preschool programs. The initiative is designed to provide universal access to preschool for up to 15 hours a week or for 600 hours a year.

WINNER: Diplomats

The Government has committed $98.3 million over four years for new diplomatic posts in Papua New Guinea, Qatar, Indonesia, Thailand and Mongolia, plus increased resources for Houston in the US.

WINNER: The terminally ill

People with a terminal illness will now be able to access their superannuation earlier. Under the previous rules, patients required two medical practitioners, including a specialist, to certify that they were likely to die within one year to gain unrestricted tax-free access to their superannuation balance. The Government will change that period to two years starting from July 1.

WINNER: Aussies from the Top End

The Government wants to turbo charge the Northern Australia region, devoting billions in funding towards improving its infrastructure, establishing business links with overseas neighbours including Indonesia, Papua New Guinea and Timor-Leste, and establishing the region as a global leader in tropical health. A fund will provide up to $5 billion in loans to private companies to build major projects such as rail lines, ports, electricity and pipelines. There’s also $100 million to build better transport links for the cattle industry. A further $2.5 million will be provided to improve business ties with Indonesia, Papua New Guinea and Timor-Leste. A discussion paper on developing northern Australia will also be released later this year, which will look at ways to unlock the region’s potential.

WINNER: West Australians

West Australians will be the beneficiaries of a one-off $499 million payment to the state to make up for a shortfall in GST revenue. The money will be spent on nine infrastructure projects.

LOSER: Stay-at-home parents

Stay-at-home parents who aren’t working, studying or in training will lose out on childcare subsidies if their household income is more than $65,000.

LOSER: Expectant parents

Roughly 80,000 expectant mothers who also get a parental leave entitlement from their employers will be $11,500 worse off. The Government said it will no longer allow those parents to also claim the Government’s paid parental leave scheme, accusing them of “double dipping”.

LOSER: Hospitals

Despite an overall increase in hospital funding over the next four years, medical groups and the states are angry that the government hasn’t reversed the cuts contained in last year’s budget. The changes peg funding to population growth not funding for services, which the states and territories claim will leave them $57 billion worse off over a decade. It’s also stripped $1.9 billion in this budget from a range of programs including preventative health research and cancelling GP Super Clinics, money which it claims will be reinvested in the Medical Research Future Fund. Overall hospital funding will rise by $1.618 billion in 2015-16 to $15.459 billion, peaking at $18.873 billion in 2018-19.

LOSER: Wealthy pensioners

About 91,000 people will lose their pension payments while another 235,000 will be worse off, as the Government tightens the assets test for the age pension. Pensioners with assets of more than $823,000 (excluding the family home) will no longer receive any pension payments. The threshold used to be $1.15 million.

LOSER: Backpackers

Backpackers on working holiday visas will no longer enjoy the same $18,000 tax-free threshold as everyone else. In fact, they’ll enjoy no threshold at all. Backpackers will be paying tax on every dollar they earn in Australia. Unless, of course, they’re doing the dodgy thing and getting cash in hand.

LOSER: FIFO workers

Fly-in-fly-out workers will lose out on a generous tax break they currently enjoy. The Government said it will tighten the Zone Tax Offset to exclude FIFO and drive-in-drive-out workers. The tax break is supposed to help out people living in remote areas but 20 per cent of people who claim this tax offset don’t actually live in those areas full-time so they don’t face the same challenges as those who actually do. FIFO workers will lose out on the tax break as soon as July 1 comes around. It’s supposed to save the Government $325 million.

LOSER: Welfare cheats

People who rort Australia’s welfare system are on notice. The Government will return about $1.5 billion to the Budget’s bottom line over four years by giving the Department of Human Services better resources to detect, investigate and deter suspected welfare fraud and non-compliance. This will include $60 million for the Department’s technology systems to help track down cheats.

LOSER: Public servants

Jobs are expected to go from federal departments as the Government continues its plan to shrink the size of bureaucracy. A total of $244 million is forecast to be saved over the next four years through cuts to the education and health departments. The Government will also axe 35 government bodies.

LOSER: The arts, culture and recreation

Spending on the ABC, SBS, arts, cultural heritage, sports and national parks will be slashed 13.4 per cent between 2015-16 and 2018-19. The Australia Council will have $1.8 million pulled from its budget every year for the next four years while Screen Australia will lose $900,000 every year over the same period. Over the next four years, $104.7 million will also be pulled from The Australia Council for the National Program for Excellence in the Arts — money which will be redirected to the Attorney-General’s Department.

LOSER: Foreign countries

The Government has slashed foreign aid by a staggering $4 billion over the next three financial years. The measure has been controversial this year as there were fears aid for Indonesia would be cut due to execution of the Bali Nine ringleaders. But in contrast to last year, the Budget did not provide a breakdown of where the money would be going.

LOSER: Dodgy trainers

Unscrupulous operators in the vocational education and training sector have been put on notice, with the Government injecting a further $18.2 million over four years to implement an enhanced compliance regime for the VET FEE-HELP system to stamp out rorting. The program will help crack down on inappropriate market practices, protect vulnerable students and ultimately save taxpayers money.

LOSER: Anti-vaxxers

If you don’t believe in vaccination, the Government doesn’t believe in you. Under the tough new “No Jab, No Pay” rules coming on January 1, 2016, families who refuse to vaccinate their children will lose access to childcare benefits and the Family Tax Benefit Part A supplement. The Government expects the move to save $508.3 million over five years.