This year’s Federal Budget was not a great one for home buyers, but it was a great year for Queensland infrastructure funding. One-fifth of the Federal Government's $24.5 billion to be spent on roads and rail was allocated to the Sunshine State. This allocation is part of a 10 year $75 billion infrastructure commitment from the Federal Government.
Lower income earners get some great tax breaks, and there is a new seven year Personal Income Tax Plan that is set in place. All in all, Queenslanders get a win however, when there are winners, there are also the losers. And any budget is underpinned by a healthy employment outlook, 3% GDP growth, and a predicted return to surplus in 2019/20. Keep reading for more highlights from the budget.
The centerpiece of this year’s Budget is the new seven year Personal Income Tax Plan.
- Step 1 of the plan offers immediate tax relief for low and middle-income earners
- Step 2 combats bracket creep with an increase in the ceiling of the 32.5% tax bracket
- Step 3 lifts this threshold in 2024-25, effectively removing the 37% bracket entirely
The signalled income tax cuts, however, are modest and unlikely to strongly shift the dial on consumer sentiment. One win for Australia is that the proposed Medicare levy increase of 0.5% has been scrapped.
Big infrastructure commitments are applauded, with all major announcements being rated as high priority projects by Infrastructure Australia. Although the infrastructure project funding has been added to the Budget, there is no word on when the funding will be funnelled into the specific projects.
The 2018 Budget is already being referred to as the Baby Boomer Budget and will see older Australians breathe easy with several superannuation-friendly measures proclaimed.
As for business, you can read our separate article outlining the good, the bad and the ugly from this year’s budget. One thing worth a mention here, however, is that the government will now require company directors to hold a unique Director Identification Number. They will also be consulting on a new ABN framework to better identify businesses engaging in black economy or illegal phoenixing activity.
Here are some of the good bits across a range of areas.
- A $10,000 wage subsidy will be made available to employers who hire older Australians
- The National Schools Chaplaincy program won an extra $247 million in permanent funding over four years
- The Medicare Guarantee Fund will receive $34.4 billion
- The Royal Flying Doctor Service will get $84 million
- Large lump sum cash payments over $10,000 will be banned
- The $20,000 instant asset tax write-off will be extended for another 12 months for small businesses
- The government is investing more than $500 million in the Great Barrier Reef
Ofcourse, in every budget, there are cuts across all industries, here are some of them from this year’s federal budget that will affect almost everyone.
- $17 billion cut from schools
- $715 million cut from hospitals
- No new policies or funding for combating pollution and climate change
- More than $80 million in cuts to the ABC
- $205 million cut from the AFP
- $40.7 million cut from veterans services
$1.5 billion cut from remote indigenous employment and housing