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Federal Budget - A Summary

24 Sep 2015

The Federal Treasurer, the Hon Joe Hockey, delivered the budget on 12 May.

Treasury forecasts suggest that Australian businesses will start to use much more of the spare productive capacity lying idle in Australia's economy over the next two years, with economic growth returning to "trend" by 2016/17.

The unemployment rate is expected to peak at 6.5%.

A brief summary of the 2015 Federal Budget is as follows:

ECONOMY
• Budget deficit of $35.1 billion for 2015/16
• Unemployment rate of 6.5% for 2015/16
• Economic growth of 2.75% for 2015/16

SMALL BUSINESS
• Tax break for purchases up to $20,000
• Tax cut of 1.5% for small companies
• Tax discount of 5% for small unincorporated businesses
• Removal of fringe benefits tax on mobile devices

Small enterprises are being encouraged to go out and invest in their businesses through generous new tax deductions. There are also tax breaks that the government hopes will foster job growth. The tax measures for small business are the single biggest spending items in the budget.

HEALTH
• Almost $2 billion in savings
• $400 million to be distributed from Medical Research Future Fund
• $1.6 billion to list new drugs
• More consumer choice in aged care

FAMILIES
• An extra $3.5 billion over five year for childcare
• Focus on lower and middle income families, as well as disadvantaged children
• Two year trial for nannies, at a cost of $246 million

PENSIONS
• $2.4 billion saved by increasing asset test threshold and taper rate for the pension.
• Dumping 2014-15 proposal to index pensions to consumer price index
• $128 million for not going ahead with last budget's measure that would freeze income eligibility thresholds for three years
The government estimates 170,000 pensioners with "modest" assets will receive about $30 more a fortnight with its changes. About 91,000 pensioners will no longer qualify for the pensions a result of tighter assets tests, but they will keep their Commonwealth Seniors Health Card.

WELFARE
• Young unemployed no longer have to wait six months for dole
• Unemployed up to the age of 25 wait four weeks
• Changes to keep 22-25 year olds on lower Youth Allowance delayed
The Coalition has scrapped one of the most unpopular measures of the 2014 budget and has backed down on forcing young unemployed to wait six months before receiving the dole. The waiting period has been cut back to four weeks and will apply to under 25s rather than the under 30s in the original proposal. The change will cost $1.8 billion.

EDUCATION
• University graduates to repay debts when overseas ($140 million over 10 years)
• The National Collaborative Research Infrastructure Strategy to be funded for two more years, funded by cuts to research support programs
• $4 million to establish Bjorn Lomborg's Consensus Centre methodology in Australia
• $16.9 million to improve teacher education, including toughened accreditation

INFRASTRUCTURE
• Government remains committed to Melbourne's East West Link motorway, will not redirect funding
• No new money for road or rail projects in Sydney or Melbourne, beyond last year's promises
• Potential privatisation of the Australian Rail Track Corporation, owner of interstate tracks
• Commitment remains to Badgerys Creek Airport in Sydney, but no new funding beyond $2.9 billion for nearby roads
The Abbott government failed to find any extra money for new road and rail projects in the country's major cities.

ENVIRONMENT
• Climate Change Authority's funding extended for two years by $6.1 million while it reviews Australia's climate polices
The Climate Change Authority – slated for abolition – has new funds. Less fortunate was the Clean Energy Finance Corporation which is still set for abolition.