Yahoo Finance Federal Budget 2015 LIVE blog: Joe Hockey hands down his second budget
Welcome to the LIVE coverage of Federal Budget 2015 on Yahoo7 Finance.
A blow-by-blow account of Treasurer Joe Hockey's budget speech, details of winners and losers, expert commentary, all the action and reactions from social media, and a very cool interactive graphic.
8:40 PM So everything we know now:
$10 billion for families and small businesses, including a generous 100 per cent deduction on new equipment purchases of $20,000 each,
$6 billion in trade agreements with China, Korea, extending to India
The Government is committing an extra $450 million for our intelligence capabilities to ensure that we have the very best equipment and skills necessary to keep our community safe.
New mothers will have to choose between taxpayer-funded paid parental leave and whatever their employer offers under a crack down on "double dipping".
Foreigners on working holidays will deliver $540m
FIFOs axed from remote area tax benefit - estimated to deliver $325m boost to revenue
Budget to deliver a boost for infrastructure - - $5B Infrastructure facility will provide $327M in 2016/17
8 PM: The Treasurer has wrapped up the budget speech to a warm response from his colleagues. "This is a budget as much for the miners of the Pilbara, as it is for the farmers in the Mallee. It is as much for a family in Brisbane, as it is for a start up business in Adelaide,"Hockey said.
In a nutshell, he announced many of the things we already know - the childcare package, the so called Netflix tax and the plan to crack down on multi national corporate tax avoidance.
7:55 PM:
Telcos will receive $131.3 million from the federal government to help collect and store metadata for two years under tough new security laws.
The money will be provided over three years to help telcos cover the cost of retaining a limited set of metadata for two years.
Parliament passed tough new data retention laws in March to give law enforcement and security agencies access to data collected by telcos from customers.
Try to imagine how many times they sent that metadata graphic back. "Make it simpler! So simple that a child or Minister can understand it!"
— Jess Gabriel (@ConstantStars) May 12, 2015
What happens to all that unclaimed cash...
Bank accounts and life insurance policies will be allowed to be left dormant for longer before they fall into government hands.
Unclaimed savings and policies will be left for seven years before being transferred, rather than the three-year period introduced in 2012 by the previous federal government.
Children's bank accounts will be exempt, meaning those funds will never be transferred to the government.
The new rules come into effect on December 31 and are expected to reduce the government's cash balance by $285 million over four years.
Bad news for backpackers!
Backpackers working casually in Australia will no longer enjoy their extra cash tax free.
The federal government will change the rules for working holidays from July 1, 2016, meaning tourists will be taxed at 32.5 per cent from the very first dollar they earn, delivering an estimated $540 million to budget bottom line over four years.
Currently, foreigners on working holidays enjoy a tax-free threshold on their first $20,000 in income, and a 19 per cent tax rate on earnings up to $37,000.
The move is set to have a massive impact on the agricultural sector, which relies heavily on casual workers, most of them backpackers, to carry out seasonal work such as fruit picking.
The drastic increase in income tax for overseas, casual workers will make it increasingly difficult for employers to find flexible, temporary staff.
This budget is both responsible and fair, says @JoeHockey #Budget2015 http://t.co/CjsINCsvZd
— 7News Yahoo7 (@Y7News) May 12, 2015
ABS gets a boost
Almost $235 million is being spent to improve the way official economic data is compiled and produced.
The Australian Bureau of Statistics will receive the funds over five years as it carries out a major transformation program, overhauling the processes and systems that support its production of important data, the federal government's budget papers said.
The bureau collects a wide range of social and economic data, and in 2014 admitted to errors in its jobs figures.
Everything we spend in this Budget is being paid for by prudent savings in other areas #Budget2015
— Joe Hockey (@JoeHockey) May 12, 2015
Bank accounts and life insurance policies will be allowed to be left dormant for longer before they fall into government hands.
Unclaimed savings and policies will be left for seven years before being transferred, rather than the three-year period introduced in 2012 by the previous federal government.
Children's bank accounts will be exempt, meaning those funds will never be transferred to the government.
The new rules come into effect on December 31 and are expected to reduce the government's cash balance by $285 million over four years.
7:50 PM: The big drop - dole-wait measure axed!
The Treasurer has confirmed that one of the most unpopular measures from last year's budget - the six month waiting period for young people wanting to receive unemployment dole - has been dropped.
"That previous program is not off the table," Mr Hockey says. Instead people aged under 25 will now have to wait four weeks before accessing the payment.
There is also $330 million to target areas with high levels of youth unemployment. "Whether you are young or old and no matter where you live, we want all Australians to have the opportunity to get a job and stay in a job," Mr Hockey says.
Hockey proud to say - and the crowd goes while as he says it - he is determined to ignore $50 billion in super tax concessions #budget2015
— Australia Institute (@TheAusInstitute) May 12, 2015
The big childcare and employment announcement...
The government will pump in an additional $3.5 billion to reform the child care system and $330 million to help young and disadvantaged Aussies.
"We are introducing a $212 million Youth Transition to Work program".
#Budget2015 is a “Slash and burn” budget: foreign aid cuts a double whammy, hurting the world’s poor and Australia’s national interest
— Save the Children (@savechildrenaus) May 12, 2015
7:45 PM: Treasurer's plan to keep up with the digital age: Fringe Benefits Tax on portable digital goods - ABOLISHED!
We are abolishing Fringe Benefits Tax on all portable electronic devices used for work, like mobile phones, laptops and tablets #Budget2015
— Joe Hockey (@JoeHockey) May 12, 2015
And something for our farmers...
New immediate deductions for farmer water savings, fencing. @JoeHockey #Budget2015 http://t.co/CjsINCsvZd
— 7News Yahoo7 (@Y7News) May 12, 2015
Here comes the small business sweetener!
"Every small business will get a tax cut. We are the only government that will deliver tax cuts to small business because we want them to grow and employ more people"
"From 7:30pm tonight, small business can claim an immediate tax deduction for each and every item they purchase up to $20,000".
"I, like so many of my colleauges, grew up in a small business family."
"That small business put a roof over our heads. It paid the bills. It gave all of the family a chance of a better life. Small business is often a family business. A business of brothers and sisters, uncles and aunts, cousins, parents and children. And for those who work in a small business, who are not related, well they often become family."
What's in the budget for start-ups:
* Able to immediately deduct cost of establishing new business
* Streamlined business registration
* Tax concessions for employee share schemes
* Fewer obstacles to crowd-sourced funding
What it means: If you run a cafe, you get breaks on things like tables and chairs, if you're a tradie you can claim on your implements. Sweet!
INSTANT TAX WRITE-OFFS - GIDDYUP! This is HUGE for Small Business… #budget2015
— Trevor Long (@trevorlong) May 12, 2015
7:40 PM: The importance of China and India...
The Treasurer has stressed the importance of great relations with China and how it's working for Australia. "For every dollar we spend buying China's goods, Chinese spend $2 to consume our goods".
"We are investing $6b in trade agreements with China, Korea, extending to India."
7:30 PM: Joe Hockey has started speaking in Parliament. "A glass half-full".
"Today, I'm speaking directly to you, Australia...Through successful planning we are transitioning successfully from mining boom depended economy to a wider [diversified' economy".
"We are now among the fastest growing economy in the developed world".
Hockey has announced that the government is repairing the budget and directing funds towards areas like small business.
"We are rolling out the biggest infrastructure programme in the country. Australians' quality of life has improved, we are paying less on our household bills. Our economic plan is working".
Hockey has also outlined the difficulties the government has faced preparing the budget - droughts in NSW and Queensland, the dramatic drop in iron prices and a weaker than expected global economic recovery.
"But I say to you, the eonomic plan laid down by this government more than a year ago, is in place and it is helping us to deal with these challenges."
"Through careful planning we are successfully navigating the difficult transition from a mining investment boom, to one of broader based growth across our economy."
@JoeHockey Mothers not 'double dipping'. Designed for mothers to complement employer-provided leave as per Productivity Comm recommendation.
— Marian Baird (@ProfMarianBaird) May 10, 2015
WATCH THE BUDGET LIVE
Tonight I will hand down #Budget2015 - it will help to create jobs, build economic growth and create opportunity for all Australians
— Joe Hockey (@JoeHockey) May 11, 2015
7:00 PM, AEST:HERE'S EVERYTHING WE KNOW SO FAR
Crackdown on welfare cheats:
* Crackdown on welfare cheats through better data matching to identify fraud. Centrelink computer upgrade worth $1 billion to help with this.
Childcare:
* Major $3.5 billion reform to child care, with single payment paid directly to childcare centres to reduce parents' upfront costs. Stay-at-home parents with a family income of more than $65,000 will no longer secure childcare subsidies.
Health:
* Plans for a $20 billion medical research fund to go ahead
* Pharmaceutical Benefits Scheme changes to save about $3 billion over four years, and comes via removing subsidies from a raft of over-the-counter medicines. Health savings likely to total $7 billion over forward estimates.
Superannuation and age pension:
* No changes to superannuation this term
* Tighter access to age pension. Part-pension assets test (excludes family home) to be cut to $820,000 for couples.
Business:
* $128 million over four years for a financial crimes task force
* Global companies to face tighter laws on shifting profits to foreign tax havens. First tranche of this is expected to reap money in forward estimates.
It's also interesting that while Budget 2015 has sparked a lot of interest, the ghost of Budget 2014 still looms large. Take a look at last year's horror budget in the only way that does justice to it... in memes!
