01.Not many grinners after a tough budget
The Federal government has now released its first Budget, and this one's a doozy. We were promised no new taxes and no surprises, but the burden of returning the Budget to surplus seems to be firmly placed on consumers. So who is set to benefit and who will be crying all the way to the bank?
Budget 2014 winners
- Taxpayers with simple affairs. They won’t need to file a tax return, with the ATO doing so automatically on their behalf.
- Working women and couples planning children. They’ll come out on top with the paid parental leave scheme.
- Medical Research. The government has announced it will establish the Medical Research Future Fund, set to eventually be worth $20 billion.
- Businesses. The company tax rate will be cut by 1.5% from July 2015 (though for large companies, this will be offset by a new paid parental leave levy).
Budget 2014 losers
- Anyone who gets sick. Australians who go to a doctor or get blood tests or X-Rays and are currently bulk billed will see an increase in costs from 1 July 2015 thanks to a new $7 co-payment (limited to the first 10 visits for concession card holders and children under 16). Non-bulk-billed patients will also have to cough up more – thy’ll be out of pocket an extra $5 per visit. Add to that an increase of $5 for medication covered under the Pharmaceutical Benefits Scheme (PBS) and PBS safety net thresholds that will kick in only after increased out-of-pocket expenses, and it’s clear Australian consumers’ health spending is on a sharp upward trajectory.
- Anyone with a car. The unfreezing of the fuel excise levy will lead to an increase in petrol prices twice a year, adding about two cents a litre to the cost of petrol from August.
- University students. They will face cuts to university funding, potentially higher fees, will pay more interest on their HELP loans and will have to pay back their loans on a lower income.
- Hospitals. Spending growth from the federal government to hospitals will decline and a host of funding programs have been cut.
- Pensioners. Starting from the next election (assuming the government is re-elected) pensions will be indexed to CPI rather than wage growth.
- Anyone counting on their super contributions to go up. The government will freeze increases in compulsory superannuation contributions at a rate of 9.5% from 2014 to 2018.
- Any individual earning above $180,000 a year. They’ll have to pay a 2% debt levy for three years.
- Families on a single income above $100,000 and $150,000, or those earning below $100,000 but with children aged six or over. They will no longer be eligible for Family Tax Benefit B.
- School leavers with no plans to study. They’ll be forced to "earn or learn", and will have to wait for six months after they finish studying before they qualifying for payments.
- Unemployed people under 30. They'll face tough new criteria to qualify for the dole.
- Public servants. The Government has abolished over 230 programmes and closed or merged 70 agencies, bodies, boards, committees and councils, with thousands of job losses to come.
- ABC and SBS fans. The networks will have their funding cut by one per cent.
For a more detailed analysis on the 2014 Federal Budget, head to CHOICE's 2014-2015 Federal Budget wrap-up.