BUDGET 2016: Winners and losers

The 2016 budget was not a lavish exercise in pre-election sweeteners, nor a series of draconian cuts.

 

Instead the 2016 budget is a mixed bag of winners and losers across various portfolios. Here’s who came out on top and who can expect tougher times.

Also read: Morrison hypes unique budget for ‘extraordinary times’

 

TAX

 

Winner: Middle income earners. A leading showpiece of the 2016 budget, from 1 July this year, the upper limit for the middle income tax bracket will increase from $80,000 to $87,000.

Winner: Small and medium businesses. From 1 July this year, the small business tax rate will be lowered to 27.5 per cent and the turnover threshold for small businesses able to access it will increase from $2 million to $10 million.

 

Loser: Tax-dodging multinational corporations. A new Diverted Profits Tax will impose a 40 per cent penalty rate of tax on multinational corporations that attempt to shift their Australian profits offshore to avoid tax. This will be supported with the launch of a Tax Avoidance Taskforce.

SUPERANNUATION

 

Winner: Low income earners. The introduction of a Low Income Superannuation Tax Offset from 1 July will ensure that people earning less than $37,000 are not paying more tax on their superannuation than they are on their income.

 

Loser: High income earners. For those earning over $250,000, the 30 per cent tax on concessional contributions will be extended.

 

HEALTH

 

Winner: Public hospitals. There will be an estimated additional $2.9 billion over three years from 1 July 2017 given to the states and territories for public hospitals.

 

Winner: Those in desperate need of dental care. The government will establish a $1.7 billion Child and Adult Public Dental Scheme to “ensure that dental spending is prioritised to those most in need.”

 

Loser: Smokers. The government will implement a further four annual 12.5 per cent increases in tobacco excise, with the first increase to take effect on 1 September 2017.

 

Loser: National Blood Authority. Payments related to the National Blood Agreement for the National Blood Authority (NBA) are expected to decrease by $115 million in 2016-17 and $436 million over the five years to 2019-20.

 

Loser: Medical Benefits program. Payments related to the Medical Benefits program are expect to decrease by $190 million in 2016-17 and $454 million over the five years to 2019-20.

Also read: Cheat sheet for understanding the budget

 

INFRASTRUCTURE 

 

Winner: Various Aussie states. $50 billion in infrastructure spend between 2013-14 and 2019-20 will fund the National Water Infrastructure Loan Facility nationally, alongside the Melbourne to Brisbane Inland rail and the Forrestfield-Airport Link in Perth.

 

WELFARE

 

Loser: Potential new carbon tax compensation recipients. The government claims as it scrapped the carbon tax back in 2014, there is no longer a need to continue the compensation for cost of living increases that will now not occur. Existing recipients will continue to receive payments, but new recipients will not be added.

Also read: Budget explainer: why the federal budget falls in May 

 

DEFENCE

 

Winner: Navel shipbuilding. 54 new vessels will be built, including 12 submarines, 12 offshore patrol vessels, nine future frigates and 19-21 pacific boats.

AGRICULTURE

 

Winner: Northern Australia. The $1.2 billion white paper on Developing Northern Australia includes a $100 million Beef Roads Programme and a $75 million Cooperative Research Centre for Northern Australia.  

EDUCATION

 

Neutral: Schools. There will be an additional $1.2 billion for schools between 2018 and 2020. However, this is some $3 billion short of the Gonski recommendations, so may prove inadequate.  

 

SCIENCE & TECHNOLOGY

 

Winner: Entrepreneurs. The government’s ‘Ideas Boom’ is focused on backing entrepreneurs and innovators. The $1.1 billion National Innovation and Science Agenda and other new measures will “support a culture of ideas and innovation to encourage commercialisation, reward enterprise and facilitate investment.”

Also read: How the deficit obsession is eroding the budget's usefulness

EMPLOYMENT

 

Winner: Young job seekers. The Youth Jobs PaTH (Prepare-Trial-Hire) Programme will attempt to help young job seekers to “move off welfare and into employment.”

 

Loser: Those utilising Work for the Dole. The government is reforming Work for the Dole, changing the Stream A job seekers entry into the Work for the Dole phase after 12 months of participation in jobactive, instead of the current six months. It is expected to decrease government payments by $128 million in 2016-17 and $494 million over four years to 2019-20.