by Weber Shandwick
 

Tonight the Federal Government unveiled its highly anticipated second Budget – one that was markedly different from last year’s ‘repair job’ of the country’s apparently dire economic circumstances.

This year, the declaration that ‘the age of entitlement is over’ has been replaced by a softer Budget, with a ‘measured, responsible and fair’ mantra. The Treasurer directly addressed the people of Australia and urged them to ‘have a go’. He specifically made mention of the incentives to be gained from tax cuts for business and improved childcare subsidies. There was also a focus on making the tax system fairer by closing loopholes and targeting multinational companies.

The Weber Shandwick Corporate & Public Affairs team was at Parliament House for the Abbott Government’s second Federal Budget, and canvassed a range of key portfolio updates below:

Key take-outs:

  • Budget deficit doubles to $35bn in 2015-16
  • Deficit predicted to fall to $7bn by 2018-19
  • $5.5bn pledged for small business aimed at unleashing the jobs and growth potential and getting Australia spending
  • Decline in mining sector contribution to economy from 45% to 16% over next three years
  • Crackdown on welfare fraud to net $1.7bn over forward estimates
  • $1.2bn directed towards national security, including fight against Islamic State
  • $300m allocated to farmers battling drought
  • $1.6bn towards new and amended PBS listings, including more effective cancer treatments

 BUDGET NOTES

 Small Business:

  • Small corporations (under $2m revenue) tax rate cut to 28.5%
  • Unincorporated small businesses receive a 5% tax discount, up to $1,000 pa
  • Immediate tax deduction for new assets under $20,000
  • $200m – expanded tax concessions for Employee Share Schemes
  • New businesses can immediately deduct start-up expenses
  • Small businesses can change legal structure without attracting a capital gains tax (CGT) liability
  • Accessing crowd sourced funding to become easier

 Healthcare:

  • $2.3bn increase in health spending
  • $1.6bn towards new and amended listings on PBS scheme, including more effective cancer treatments
  • $400m redistributed from the MRFF over the next four years to help medical researchers develop drugs & cures
  • $300m in funding for mental health groups; $200 m for dental healthcare
  • Reforms to government public service (particularly in the Department of Health) to reduce waste and streamline services

Finance and Tax:

  • A Multinational Anti-Avoidance Law for foreign businesses and increased penalties for breaches
  • Foreign investment subject to more enforcement, stricter penalties and new application fees
  • GST applied to intangible purchases such as downloads (‘Netflix tax’)
  • Recovering HECS debts from Australians living overseas to reap $26m
  • FBT meal exemptions for not-for-profit employees capped at $5K
  • Changes to the way workrelated car expense deductions are calculated
  • $265.5m for ATO to extend the GST compliance program
  • $100m cap on research and development (R&D) tax concession
  • Ending the tax free threshold for working holiday visa holders
  • Fly-in fly-out (FIFO) and drive-in drive-out workers no longer eligible for the Zone Tax Offset

Employment:

  • A $330m program to cut waiting time for unemployment benefits from six months to four weeks for people under the age of 25
  • Annual commitment of $18m for job seekers to undertake work experience while still receiving income support
  • $106m towards supporting vulnerable job seekers, including disadvantaged young people

Border Protection and Immigration:

  • $550m savings from closing detention centres
  • The immigration detention centres at Phosphate Hill and Construction Camp on Christmas Island and Blaydin in Darwin will be closed
  • The North West Point facility on Christmas Island will transition to a contingency setting for use as a reception processing site by July 2016
  • Investing $141.9m in capital funding to provide new infrastructure to support refugee resettlement
  • $270m savings from the merging of Customs and Department of Immigration
  • $39.9m investment over four years from 2015‑16 to continue anti people smuggling strategic communications campaigns

Defence:

  • Government to disband the Defence Materiel Organisation (DMO) and transfer its core responsibilities and funding to the Department of Defence
  • $1.2bn package for national security
  • $296m will be invested in new information technology capabilities for intelligence agencies
  • $131m investment for metadata retention
  • $22m will be provided to combat extremist propaganda on the Internet and social media
  • $31bn investment in troops and cutting edge technology such as new fighter jets

Education:

  • Students with disabilities to get record $1.3bn boost for extra help in classroom

Social Welfare:

  • $3.5bn child care reform package to encourage parents to go back to work
  • Parents earning $65,000 or less to receive subsidy of 85% of child care fees
  • $869m pledged to Child Care Safety Net to assist vulnerable, disadvantaged and additional needs children
  • Aged pension – tougher asset test to access the part-pension, but those with Seniors Health Card won’t lose access
  • ‘No Jab No Pay’ rule to excludes parents who don’t vaccinate their children from benefits.
  • Parental Leave Pay limited to individuals whose employer doesn’t provide parental leave entitlements
  • The Government will invest more than $330m to help young & disadvantaged Australians start a career
  • Limited two year trial for nannies, at a cost of $246m

Infrastructure and Regional Development:

  • Establishing $5bn Northern Australia Infrastructure Facility for major infrastructure projects such as ports, railways, pipelines and electricity generation
  • $101.3m over four years to improve cattle supply chains in the north, with a particular focus on road infrastructure
  • $45.0m from 2015‑16 to establish a program to fund small capital projects put forward by community groups
  • $499.1m in 2014‑15 towards economic infrastructure projects in Western Australia

Agriculture:

  • $271.8m over four years to extend current drought initiatives
  • $60.8m over four years as part of a package of measures to support drought‑affected local communities
  • All primary producers can immediately deduct capital expenditure on fencing and water facilities

Detailed portfolio explanations and figures can be found at www.budget.gov.au.

This summary was prepared by the Weber Shandwick Corporate & Public Affairs team, led by Jacquelynne Willcox (JWillcox@webershandwick.com).  

 

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