Nathan’s 2013/14 Federal Budget Summary
For good or for bad, this year’s budget was almost a non-event, both in delivery and also the coalition reply. Treasurer Wayne Swan has delivered an election year budget with little incentive for business or sweeteners for the electorate, announcing a deficit of $18 billion and the much vaunted budget surplus won’t occur until 2015 when Swan is banking on a surplus of $800 million. What could’ve been the platform for some election policies and promises has turned out to be confirmation of previously announced tweaks to existing legislation, and large scale projects such as the NDIS and Gonski Education reforms. As always, the budget announcements should not be taken for granted as they often change and get tweaked as they pass through both houses of parliament. Furthermore with the September election a lot of these won’t get through parliament before the election, so both the Labor and Coalition plans for the budget should be considered this year.
Contents of this budget paper
- Summary of budget delivered by government
- Summary of coalition reply
- Summary of how it affects each demographic
- How to make the most out of the budget and save tax!
- Details of budget announcements
Summary of the budget delivery
Here’s a brief round-up of what the budget means for your business or family and the economy as a whole;
Winners
- Infrastructure: A$24 billion road and rail infrastructure program to begin, including A$3billion Melbourne metro rail tunnel and A$1.8billion M4 and M5 upgrade in Sydney to be built in five years
- Seniors: A$112 million pilot Grey to Gold plan allowing seniors to downsize their homes and invest the returns without affecting their pensions
- Schools/education: A$9.8b over six years for a new needs-based funding model for schools A$2.9 billion in the budget over four years
- Disability: A$14.3 billion investment for national disability insurance scheme, Disability Care Australia, paid for by increase in Medicare levy
- Health: A$226 million to fight cancer, including detection, treatment and research, and provide better patient care and support.
- Disadvantaged: New welfare and health spending of A$1.8 billion
- Students and employees: Education, skills and research funding of A$1.2 billion
Losers
- Multinational companies: Tighter corporate tax rules to raise A$4.2 billion over four years and A$219 million in savings
- Resources: Tighter rules on exploration deductions for miners that give the government A$1.1 billion over four years. A$500 million cut from carbon capture and storage programs.
- Employment: More than 1200 public service jobs lost
- People: A$1.5 billion in personal income tax cuts from July 2015 following sharp fall in carbon price
- Parents: Baby bonus abolished, saving A$1 billion over four years
- Foreign aid: Government to defer an increase in the aid budget
- Families: A reduction in the time allowed to claim family tax benefits and child-care assistance to save A$562 million over five years
1. Superannuation
- Concessional contribution (deductible) cap changes up to $35kpa 2014FY 59+, 2015FY 49+
- Excess concessional (deductible) contributions taxed at marginal rates plus interest 1/7/2013
- Pension earnings over $100,000 to be taxed at 15% 1/7/2014
- Contributions tax doubling to 30% if you earn over $300,000
2. Taxation
- Income tax cuts put on hold
- Medicare levy increased to 2%
- Low-income threshold for Medicare Levy increased to $33,693 2013FY
- Tax offset for net medical expenses to be phased out
- Tax deductions for work-related self-education expenses capped at $2,000
3. Social Security
- Normal deeming rules to apply to account-based pensions
- Retirees who have lived in their home for 25 years or more can downsize and exempt $200,000 from pension calculations for up to ten years.
4. Families
- Child Care Rebate frozen at $7,500 for four years
- Upper income limits frozen for family-based payments
- Baby Bonus replaced by lower payment to families receiving Family Tax Benefit (Part A)
- Family Tax Benefit (Part A) restricted to children at school
