Federal budget open thread

A thread for discussion of the federal budget, along with the federal anything-else.

As I type, Treasurer Scott Morrison is lifting the lid on the 2016/17 budget. Discuss and argue the toss here (or indeed, discuss anything else related to national affairs).

Author: William Bowe

William Bowe is a Perth-based election analyst and occasional teacher of political science. His blog, The Poll Bludger, has existed in one form or another since 2004, and is one of the most heavily trafficked websites on Australian politics.

284 comments on “Federal budget open thread”

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  4. Interesting reading

    “But in fact, this
    hypothetical market has never existed and most certainly does not exist in the capitalist worldsystem.
    Indeed those most opposed to the hypothetical market are the capitalists themselves
    because, if the hypothetical market would actually be in operation, they wouldn’t make a penny.
    The only way capitalists make serious money is if they have quasi-monopolies. To obtain quasimonopolies,
    they need intervention by the state in multiple ways and capitalists are totally aware
    of this. Talk about this hypothetical market is, subsequently, ideological rhetoric. The market
    doesn’t actually work that way and any sane and wealthy capitalist will tell you that. “

  6. KATHRYN MURPHY.

    Good evening good people of politics live, I’m back with you once again, and the good news is I have your budget at a glance.

    Here’s the information you need to know quickly.

    If you earn over $37,000 but under $80,000 there’s really nothing for you. No goodies, no tax cuts, no special items. Let me say that again, nothing.

    There’s a load of people in that category, the majority of the wage earning public in fact. Given it’s an election year, in crude political terms, I reckon that’s brave stuff in the Humphrey Appleby sense. In the budget lock up this afternoon the treasurer told journalists the public had “moved on” from binary concepts like winners and losers. I’m not sure if the public know they’ve moved on from that, but in any case, I must.

    Move on, that is. Back to budget-at-a-glance.

    If you earn $80,000 plus (that puts you in the top 25% of income earners), you get a tax cut. From July 1 the upper limit for the middle income tax bracket moves from $80,000 to $87,000. This, the government says, will stop half a million taxpayers moving into the second top marginal rate of tax. These folks also lose the deficit levy. Double plus good.

    I note in passing this budget contained no cameos showing how people are better off in all the income brackets. That’s a budget standard, so strange treasury forgot. Yes, that’s irony. Possibly no cameos because the cameos wouldn’t tell a great story – higher income earners do nicely enough, people in the middle get fat zip.

    If you are a small business, you get a tax cut too. From July 1, (a popular date, wonder why, yes that’s irony), the tax rate goes down to 27.5% and the relevant turnover threshold moves from $2m to $10m.

    Each year bigger smaller businesses will be eligible for the tax cut on offer (I hope that makes sense) with the threshold lifting from $10m to $25m (2017-18) to $50m (2018-19) and $100m (2019-20.)

    If you are a larger business, you get a tax cut as well, but you have to wait for quite a while. The corporate tax rate for all companies will be lowered to 25% in 2026-27.

    But it’s not all a free lunch.

    To try and neutralise the tricky politics of being seen to give business a tax cut at a time when there is widespread public perception that businesses don’t contribute their fair share, the behemoths get a whack. If you happen to be a multinational corporation, you will face new strictures, like a diverted profits tax. That measure, dubbed a Google tax, would apply a penalty rate of $40% to income shifted offshore, at least in theory.

    Wealthy superannuants have their generous concessions wound back. That stuff is all pretty chunky, but I reckon, on balance, it’s good. Rather than work through it in detail in this first post I will link you to our news story on that in due course. I know a lot of people will be interested so I will do that. Scout’s honour. Stay tuned.

    If you are a low income superannuant you get a low income superannuation tax offset from July 1 2017 (which the government wanted to get rid of but it has come back in this budget). This measure benefits folks who earn up to $37,000.

    If you are a young, unemployed person you get a revamped work for the dole scheme involving training and internships that pay recipients $200 a fortnight on top of income support. Businesses also get wage subsidies to take on this cohort of job seekers.

    Sticking with welfare, the bad news.

    The government has grandfathered Labor’s carbon price compensation to existing recipients, which means new people going onto welfare and transfer payments will be getting lower benefits than people currently receiving payments. To give you a couple of quick back of the envelope examples: new pensioners would get between $5.90 and $14.10 less per fortnight. People on unemployment benefits would get between $7.90 and $14.10 less per fortnight.

    Sticking with bad news, for smokers at least, tobacco excise is up in four increments of 12.5%, netting $4.7bn over four years. (Thanks Labor, that revenue was really super handy).

    If you are public servant – watch out. There is a whacking efficiency dividend in this budget, delivering a saving of $1.4bn over the forward estimates.

    For folks concerned about fiscal sustainability, the budget again tracks a slower path to surplus. A surplus doesn’t happen until 2021, which is outside the forward estimates. Budget emergency over. Fun times.

    If you are interested in infrastructure you get dams. Loads of them, potentially. And various other transport projects, including early work on inland rail and the second Sydney airport transport links.

    That’s enough to open the batting.

    The treasurer is on his feet now giving his speech.

    We’d better pick that up now for a bit before circling back to the details of budget 2016.

  8. Bloody Big Business Tax Cuts by reclassifying them as ‘Small Businesses’. I wish I had a ‘Small Business’ that turned over $10Million/year!

  9. If you earn over $37,000 but under $80,000 there’s really nothing for you. No goodies, no tax cuts, no special items. Let me say that again, nothing.

    This is a significant number of taxpayers.

  10. Yup, it looks like Sco-Mo has absolutely stuffed it. Does he really think people below $80,000 won’t see themselves as losers. What a turkey

  13. If you are interested in infrastructure you get dams. Loads of them, potentially.

    Fabulous. What we just need now is rain!

  15. Story of the Budget in a nutshell:

    (H)igher income earners do nicely enough, people in the middle get fat zip.

  19. COTMOMMA – Stop being so “binary”. Losers shouldn’t see themselves as losers, even if they are losers. What a joke.

  21. confessions

    I laughed at the mention of dams. Remember Abbott’s 100 dams ? Now remind me how many were built ? 😆

  25. So after cutting the ATO by 4,400 staff, Morrison will provide a 1,000 to target multi-nationals…WOW

  29. KEVIN-ONE-SEVEN
    Tuesday, May 3, 2016 at 7:44 pm
    COTMOMMA – Stop being so “binary”. Losers shouldn’t see themselves as losers, even if they are losers. What a joke.

    There are no losers in this race – they are merely “negative winners”.

  33. If Katherine Murphy has it right the tobacco excise revenue Morrison is claiming over the four year forwards is slightly more than the PBO forecast for labor over the same period and significantly more than what was being floated around today as part of the black hole leak.

    I am still very interested in seeing the assumptions and full box and dice on that.

    I will leave my obsession with this go now and sit back and relax.

    Cheers and a good night to you all.

  39. This is the closest Coorey gets to realising the building is on fire:

    This will be worth just $6 a week to those who receive it in full but could still expose the government to Labor claims of unfairness, given the deficit levy will also expire next year as scheduled and there was no income tax relief in the budget for those at the lower end of the salary scale. Mr Morrison said this was not so much a tax cut but a measure to give middle-income earners the “room” and incentive to earn more without penalty.

    Read more: http://www.afr.com/news/policy/budget/budget-2016-wealthy-lose-in-superannuation-shakeup-to-fund-tax-cuts-20160426-gofly6#ixzz47aKAMw4j
    Follow us: @FinancialReview on Twitter | financialreview on Facebook

  41. zoomster
    “Pyne looks as if the mirror has cracked from side to side…’
    .
    the vain prick has started using the sunbeds again. Check out the ruddy complexion……except where the dark glasses would have been.

  45. poroti @ Tuesday, May 3, 2016 at 7:55 pm

    zoomster
    “Pyne looks as if the mirror has cracked from side to side…’
    .
    the vain prick has started using the sunbeds again. Check out the ruddy complexion……except where the dark glasses would have been.

    Funny how Julie Bishop never seems to age. 😉

  46. From Coorey at 7:54 “Mr Morrison said this was not so much a tax cut but a measure to give middle-income earners the “room” and incentive to earn more without penalty.”

    A commentator on radio yesterday said most people earning enough to qualify for the tax cut were probably working long hours already and would not be wanting to work any more hours.

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