NORTHERN TAX & FINANCIAL SERVICES
The Budget for 2017–18 is focused on boosting growth in the economy by improvements in housing affordability, spending on infrastructure and education investment.
On 9 May 2017, Treasurer Scott Morrison released the Budget for 2017-18, making it clear the government will crack down on tax-dodging multinational companies. The goal – to stamp out hybrid tax abuse by banks and insurance companies who exploit tax differences between nations.
The five main banks in Australia (Commonwealth Bank, Westpac, ANZ Bank, National Australia Bank and Macquarie) are being hit with a new levy on liabilities, which it’s claimed will generate $6.2 billion over four years. A new ‘one-stop shop’ financial complaints authority announced in the Budget will also benefit Australians in obtaining fair, free and efficient dispute resolution against financial institutions. It will be a consolidation of the Financial Ombudsman Service (FOS), the Credit & Investments Ombudsman (CIO) and the Superannuation Complaints Tribunal into a single industry ombudsman scheme. It is hoped this move will decrease the misperception and varying results presently caused by overlaps and gaps across the three authorities.
For patients, a freeze on Medicare rebates is lifted so the cost of visiting the doctor will drop. However, to fund the National Disability Insurance Scheme, the Medicare levy will rise 0.5 per cent to 2.5 per cent.
While the Budget does focus on foreign investment into housing, private investment into affordable housing was also a priority. Those first-time home buyers saving to purchase their first home will receive a tax cut on saving for a deposit of up to $30,000.
For older Australians looking to downsize, the government is providing tax breaks if they place the proceeds from selling their house into their pension funds. Pensioners (aged, single parent, disability support, veterans and partners) are to receive a one-off payment to assist with power costs ($75 for singles and $125 for a couple will be paid by 30 June). While it isn’t much, a small boost is better than no boost at all.
Small businesses with a turnover up to $10 million can immediately write-off new equipment worth up to $20,000. The government wants to assist working parents by investing $37.3 billion through June 2021 to aid the reduction of childcare costs.
Over the next 10 years, Australia’s schools will receive an additional $18.6 billion in funding. The Opposition, however, believes this sector is being short-changed over the long-term. On average per-student funding will grow 4.1 per cent a year over a decade and more than 99 per cent of schools will see a year-on-year increase in funding.
Universities, on the other hand, will be subject to a $2.8 billion efficiency dividend. While the higher education reform will lead to a saving of $3.8 billion through June 2021, students will have to wear a greater share of the cost of their degrees and start paying back loans at a lower income threshold.
Students will have to pay up to $3600 more for a four-year university degree and start paying back their loans as soon as their income reaches $42,000. The most expensive degree, medicine over six years, is said to increase from 68,000 up to $71,900.
And lastly those on welfare who continuously avoid the obligation to look for work will face harsher penalties and trials will begin on drug testing for 5000 new welfare recipients.
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