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The 2019-20 Federal Budget contains few surprises and only a modicum of major initiatives: one is tempted by the view that even the Government doesn’t have its heart in it.
The major – and widely expected – initiative is an extension of the Government’s personal income tax cuts from those announced in the 2018-19 Budget which match and raise the more generous benefits which Labor announced in response to the Government’s previous measures: at a cost of $5.7 billion over four years.
Treasurer Josh Frydenberg said in his Budget “Lockup” press conference the Government would not try and force this measure through Parliament before it is dissolved for the election but would take the package to the electorate.
This contrasts with the Government’s “Power Rebate” announced before the Budget and included in it, which the Government does plan to try and push through before the election.
Other major Budget measures are:
• An extension of the small business instant asset write-off, with an increase of $5000 in the amount to $30,000 and an increase to $50 million (from $10 million) in the size of business eligible for the concession (See Small Business)
• $4 billion over four years for increased infrastructure spending
• $1 billion in increased Medicare spending (See Health) • $530 million for the Disability Royal Commission
• A small concession removing the work test for superannuation contributions for people aged 65 and 66 (See Superannuation).
The Budget’s biggest saving is a $2 billion windfall to come from a tightening of welfare payments to recipients who are also working, using the controversial automated ‘Single Touch Payroll System’ which businesses are being forced to adopt. The Budget contains little information about how this will operate but says, “From 1 July 2020, income support recipients who are employed will report income that is received during the fortnight, rather than calculating and reporting their earnings. Each fortnight, income data received through an expansion of STP data-sharing arrangements will also be shared with the Department of Human Services, for recipients with employers utilising STP.”
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