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FEDERAL BUDGET

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Who will benefit from tomorrow’s budget?

By Andrew Sykes - 8 May 2017 14

2017 Federal Budget

In just over 24 hours, the nation will learn what to expect in the year ahead when the eagerly awaited 2017-2018 Federal Budget is delivered by Treasurer Scott Morrison.

The silence has been deafening over the last few weeks. With an incredibly strict budget lock up and all leaks seemingly tightened, it’s likely we’re in for some big surprises.

Unfortunately for Public Service professionals, this could mean drastic changes and harsh cuts. Given the recent austerity, proposals from Barnaby Joyce and the Nationals to decentralise and relocate certain departments, and discussions surrounding further cuts, it’s a probable outcome. And though it pains us here in Canberra, the Public Service is an easy target for a government struggling for political credibility and hoping to win favour with the masses.

Another unfortunate easy target is university students. Recent speculation suggests that university funding will be severely reduced; student fees are set to rise; and HECS debts will be required to be paid back sooner. The planned changes, which were announced by Education Minister Simon Birmingham last week, have been met with fierce opposition from Labor, with Shadow Education Minister Tanya Plibersek labelling them “unfair”. However, the government is leaning on a report which found that universities receive enough funding to adequately teach most of their courses.

On the “no change” front, we’re expecting superannuation to be left alone. Substantial changes were already made as a result of the 2016 budget and passed in both houses of parliament last November. Most come into effect as of July 2017.

Over the past few weeks we’ve heard Treasurer Scott Morrison throw around terms like “good debt” and “bad debt” in order to distinguish between funding that contributes to the longevity of the nation, and debt incurred from band-aid spending that offers no long term benefits to the wider community.

This commentary is expected to translate into large-scale infrastructure spending, most of which will be brought forward from last year’s $50 billion dollar infrastructure program.

So will anyone benefit from a budget attempting to fix last year’s reported $37.1 billion deficit?

Well, small businesses look set to win with expectations that the $20,000 instant asset threshold increase will be extended. The government also seems quite focussed on payment cycles for small business, with COSBOA (Council of Small Business Australia) lobbying heavily to have regulations set on payment terms for small businesses working to big businesses. This would ensure that small business owners are supported in taking on larger projects and able to manage cash flow more effectively.

Education could be another winner, after the announcement of a $13.1 billion dollar funding increase. The changes serve to provide additional funding to disadvantaged schools, and outline cuts to overfunded, Catholic and independent schools. David Gonski has also promised a second major report into the way money is spent within the education system, aptly labelled Gonski 2.0.

With wages stagnant over the past decade and the cost of living increasing, we may also see some relief in terms of Medicare funding and availability for GPs.

Currently there is a freeze on GP bulk billing rates, but Labor and health advocates have been placing pressure on the Turnbull Government to remove it. There’s speculation that the change is likely to go through, however the question then becomes: Where will the estimated $2-3 billion required to lift the freeze come from?

Whatever the case tomorrow, with a difficult Senate in place we don’t expect anything that’s going to harm families too much. Most of the savings appear to be coming from deferring tax cuts for big business.

What do you think will happen in tomorrow’s budget?

This is a sponsored article, though all opinions are the author’s own. For more information on paid content, see our sponsored content policy.


Catchup on our LIVE coverage from Hotel Realm: Andrew Sykes from RSM Australia dissecting “The Rocky Horror Budget”. It was just a jump to the left for Malcolm Turnbull, but still a step to the right with continued attacks on public service pay growth and decentralisation. The impacts of the Budget for Canberra are in the detail – not the headlines.

Federal Budget 2017-18 – RSM overview.
Federal Budget 2017-18 – RSM pdf presentation.

What’s Your opinion?


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14 Responses to
Who will benefit from tomorrow’s budget?
1
devils_advocate 11:08 am
08 May 17
#

To answer the question, those that will benefit will be the baby boomers, and the wealthy, and those meeting both those criteria.
I only hope they don’t roll out more housing affordability “solutions” that actually have the effect of further inflating house prices. That would be really quite sad.

2
John Moulis 11:10 am
08 May 17
#

Even though this was paid content it gave a fairly good, unbiased overview of the Budget situation. I realise some people might accuse me of being obsessed with shock jocks and Murdoch journalists but I’m constantly amazed by their simplistic, black and white view of the Budget situation. We have a deficit? Simple! Just throw people off welfare.

It has been one of the biggest lies perpetrated by the Right that Australia has a monolithic welfare sector which is sucking the country dry as people bludge on it. In reality the Australian welfare sector is small by international standards. Australia spends 16% of GDP on welfare while many European countries spend well over 30% of GDP on welfare.

In any case, if we suddenly had a Budget surplus and no debt tomorrow, would we be any better off? No. We won’t see it in our bank accounts, the cost of living would still be high and nothing would change. The only winners would be the politicians who would have a whole new war chest for pork barrelling. Don’t ever forget how the Howard government had a surplus and created a whole new middle class welfare sector with the Baby Bonus, Family Tax Benefit A&B, free child care and all the other disgusting payments they gave to the people they liked to keep them voting Liberal.

The last thing anybody would want is to go back to that terrible era.

3
dungfungus 11:21 am
08 May 17
#

devils_advocate said :

To answer the question, those that will benefit will be the baby boomers, and the wealthy, and those meeting both those criteria.
I only hope they don’t roll out more housing affordability “solutions” that actually have the effect of further inflating house prices. That would be really quite sad.

In what way will baby boomers and the wealthy (not necessarily the same group) benefit?

4
RonHasViews 12:14 pm
08 May 17
#

As a retired General Practitioner, let me tell you that GPs are grossly undervalued. A GP saves patients a visit to the public hospital, which means hours of waiting to see the emergency doctor for triaging and/or management, and/or referral to another specialist, which could mean days of waiting. That would cost the system at least $1000 per patient. Does the government and the population really value qualified medical doctors with a specialist GP qualification to be worth just $37.05? This is appalling.
Take a look at this blog which outlines some of the costs and provides some very good comparative insight:https://thatmaledoctor.wordpress.com/
The cost to even offer a proper standard 15 minute consultation is at least $80. In USA, we’re talking $650. Lawyers charge $600/hr. Going to the public hospital system means $800 for a simple presentation, to more than $1000 that requires a second doctor/specialist. $80 itself is far too reasonable for the worth of a GP visit. A simple lift of the freeze and an increase by a few dollars is insufficient to offer quality first world health care – either the patient pays or the government does, or both. The doctor should not have to absorb this cost.

5
dungfungus 2:17 pm
08 May 17
#

John Moulis said :

Even though this was paid content it gave a fairly good, unbiased overview of the Budget situation. I realise some people might accuse me of being obsessed with shock jocks and Murdoch journalists but I’m constantly amazed by their simplistic, black and white view of the Budget situation. We have a deficit? Simple! Just throw people off welfare.

It has been one of the biggest lies perpetrated by the Right that Australia has a monolithic welfare sector which is sucking the country dry as people bludge on it. In reality the Australian welfare sector is small by international standards. Australia spends 16% of GDP on welfare while many European countries spend well over 30% of GDP on welfare.

In any case, if we suddenly had a Budget surplus and no debt tomorrow, would we be any better off? No. We won’t see it in our bank accounts, the cost of living would still be high and nothing would change. The only winners would be the politicians who would have a whole new war chest for pork barrelling. Don’t ever forget how the Howard government had a surplus and created a whole new middle class welfare sector with the Baby Bonus, Family Tax Benefit A&B, free child care and all the other disgusting payments they gave to the people they liked to keep them voting Liberal.

The last thing anybody would want is to go back to that terrible era.

“Baby Bonus, Family Tax Benefit A&B, free child care…..”

Correct me if I am wrong John but Labor didn’t take them away, did they?

And there is a raft of taxpayer concessions and freebees that are given away to the “needy” by state/territory governments too.

6
gazket 11:16 pm
08 May 17
#

no doubt the bludgers will benefit again . While the single person on average wages gets no government benefits, no over 50 club discounts, pay full freight for everything and their yearly taxes go to 2 people who earn $300k a year so they can send their kid to childcare to prop up a system full of rorts ..

great system

7
JC 11:47 pm
08 May 17
#

dungfungus said :

John Moulis said :

Even though this was paid content it gave a fairly good, unbiased overview of the Budget situation. I realise some people might accuse me of being obsessed with shock jocks and Murdoch journalists but I’m constantly amazed by their simplistic, black and white view of the Budget situation. We have a deficit? Simple! Just throw people off welfare.

It has been one of the biggest lies perpetrated by the Right that Australia has a monolithic welfare sector which is sucking the country dry as people bludge on it. In reality the Australian welfare sector is small by international standards. Australia spends 16% of GDP on welfare while many European countries spend well over 30% of GDP on welfare.

In any case, if we suddenly had a Budget surplus and no debt tomorrow, would we be any better off? No. We won’t see it in our bank accounts, the cost of living would still be high and nothing would change. The only winners would be the politicians who would have a whole new war chest for pork barrelling. Don’t ever forget how the Howard government had a surplus and created a whole new middle class welfare sector with the Baby Bonus, Family Tax Benefit A&B, free child care and all the other disgusting payments they gave to the people they liked to keep them voting Liberal.

The last thing anybody would want is to go back to that terrible era.

“Baby Bonus, Family Tax Benefit A&B, free child care…..”

Correct me if I am wrong John but Labor didn’t take them away, did they?

And there is a raft of taxpayer concessions and freebees that are given away to the “needy” by state/territory governments too.

And the Libs are now back in power and haven’t removed them. So your point?

8
dungfungus 9:13 am
09 May 17
#

gazket said :

no doubt the bludgers will benefit again . While the single person on average wages gets no government benefits, no over 50 club discounts, pay full freight for everything and their yearly taxes go to 2 people who earn $300k a year so they can send their kid to childcare to prop up a system full of rorts ..

great system

These $300K pa group are the ones negatively gearing too. It’s them, not the baby-boomers, who are destroying the economy.

9
Mysteryman 11:08 am
09 May 17
#

John Moulis said :

Even though this was paid content it gave a fairly good, unbiased overview of the Budget situation. I realise some people might accuse me of being obsessed with shock jocks and Murdoch journalists but I’m constantly amazed by their simplistic, black and white view of the Budget situation. We have a deficit? Simple! Just throw people off welfare.

It has been one of the biggest lies perpetrated by the Right that Australia has a monolithic welfare sector which is sucking the country dry as people bludge on it. In reality the Australian welfare sector is small by international standards. Australia spends 16% of GDP on welfare while many European countries spend well over 30% of GDP on welfare.

In any case, if we suddenly had a Budget surplus and no debt tomorrow, would we be any better off? No. We won’t see it in our bank accounts, the cost of living would still be high and nothing would change. The only winners would be the politicians who would have a whole new war chest for pork barrelling. Don’t ever forget how the Howard government had a surplus and created a whole new middle class welfare sector with the Baby Bonus, Family Tax Benefit A&B, free child care and all the other disgusting payments they gave to the people they liked to keep them voting Liberal.

The last thing anybody would want is to go back to that terrible era.

I must admit, I’m a little amused that you complained about journalists having a simplistic view of the budget, right before you expounded your own simplistic view.

GDP might be a very convenient measure, but it’s not a particularly useful yardstick when it comes to comparing expenditure between nations. Particularly when those nations are on the opposite side of the world, with very different economies, infrastructure, taxation systems, etc.

Secondly, I think maybe you’re failing to understand the long term implications of the rate at which our federal debt is growing. For the past 9 years there has been a chorus of people chanting that Australia has low debt to GDP compared to other nations like those worst hit by the GFC, and so they argue that there’s nothing to worry about. That’s a little like comparing cancer to AIDS. Neither of those is good, and taking comfort from the fact that someone else’s situation is worse doesn’t help to correct the situation we are facing. Debt to GDP ratio isn’t the issue. The issue is the rate at which our debt is growing, where that debt is held, and how likely it is that we can actually repay that debt.

The bad news is that the debt is growing fast. The Abbott government had their savings measures blocked in the Senate year after year by an opposition that didn’t give a stuff about addressing the debt. The same thing has been happening to the Turnbull government. Meanwhile Labor/Greens and their supporters have been yelling about how the Coalition increased the deficit. Well, that happens when you have to keep spending money to ensure the country runs, and at the same time have your savings measures rejected. Both sides of Parliament are playing games with the issue. Meanwhile the debt is growing. The housing bubble gets closer to bursting, ratings agencies issue warning after warning that our ratings will be downgraded, foreign debt is growing, and ready to exacerbate the issue is the Australian dollar – usually the first of the developed world currencies to take a hit when global economic conditions worsen, which looks likely.

I know a lot of people struggle to connect government debt with real world implications. But our ability to repay this debt gets significantly worse as the debt grows. It might not seem like a problem to you now, but it will become a significant problem in the future as the Australian Government is increasingly seen as a riskier investment. Debts take a long time to pay off. Even longer in the absence of the unrealistic economic growth that would be required to offset the debt.

“In any case, if we suddenly had a Budget surplus and no debt tomorrow, would we be any better off? No. We won’t see it in our bank accounts,”

I find it hard to believe that you could actually think that.

10
devils_advocate 2:51 pm
09 May 17
#

dungfungus said :

devils_advocate said :

To answer the question, those that will benefit will be the baby boomers, and the wealthy, and those meeting both those criteria.
I only hope they don’t roll out more housing affordability “solutions” that actually have the effect of further inflating house prices. That would be really quite sad.

In what way will baby boomers and the wealthy (not necessarily the same group) benefit?

By further entrenching the economic divides that currently exist. Doubling down on the housing price growth wealth generation Ponzi scheme. Making it harder (more expensive) for those entering the job market to improve their lot through education. Cracking down on welfare cheats with broad-brush approaches that will make things more difficult for everyone, including those that legitimately need the social safety net. All while continuing to do nothing to crack down on the tax advantages exploited by the wealthy.

11
Andrew Sykes 9:10 am
10 May 17
#

Not too many surprises. ACT misses out on major infrastructure spend – all states and NT get it, we don’t. Nothing to support ACT growth industries such as education or innovation/technology either.

Great quote from Chief Minister Andrew Barr on radio this morning “ACT ignored, not attacked” – we can probably at least be relieved about that.

12
JC 9:28 am
10 May 17
#

dungfungus said :

gazket said :

no doubt the bludgers will benefit again . While the single person on average wages gets no government benefits, no over 50 club discounts, pay full freight for everything and their yearly taxes go to 2 people who earn $300k a year so they can send their kid to childcare to prop up a system full of rorts ..

great system

These $300K pa group are the ones negatively gearing too. It’s them, not the baby-boomers, who are destroying the economy.

Wow! Wasn’t it Johnny Howard who implemented many of these high end welfare payments? Thanks Johnny!

And I’ve seen everything now. A liberal budget that could have been pulled from the Labor party and a rusted on righty criticising the enduring fiscal legacy of a right wing hero.

13
dungfungus 10:36 am
10 May 17
#

JC said :

dungfungus said :

John Moulis said :

Even though this was paid content it gave a fairly good, unbiased overview of the Budget situation. I realise some people might accuse me of being obsessed with shock jocks and Murdoch journalists but I’m constantly amazed by their simplistic, black and white view of the Budget situation. We have a deficit? Simple! Just throw people off welfare.

It has been one of the biggest lies perpetrated by the Right that Australia has a monolithic welfare sector which is sucking the country dry as people bludge on it. In reality the Australian welfare sector is small by international standards. Australia spends 16% of GDP on welfare while many European countries spend well over 30% of GDP on welfare.

In any case, if we suddenly had a Budget surplus and no debt tomorrow, would we be any better off? No. We won’t see it in our bank accounts, the cost of living would still be high and nothing would change. The only winners would be the politicians who would have a whole new war chest for pork barrelling. Don’t ever forget how the Howard government had a surplus and created a whole new middle class welfare sector with the Baby Bonus, Family Tax Benefit A&B, free child care and all the other disgusting payments they gave to the people they liked to keep them voting Liberal.

The last thing anybody would want is to go back to that terrible era.

“Baby Bonus, Family Tax Benefit A&B, free child care…..”

Correct me if I am wrong John but Labor didn’t take them away, did they?

And there is a raft of taxpayer concessions and freebees that are given away to the “needy” by state/territory governments too.

And the Libs are now back in power and haven’t removed them. So your point?

Well, my point is that both sides of politics love them so why apportion blame to only one side?

14
rommeldog56 6:10 pm
10 May 17
#

Andrew Sykes said :

Not too many surprises. ACT misses out on major infrastructure spend – all states and NT get it, we don’t. Nothing to support ACT growth industries such as education or innovation/technology either.

Great quote from Chief Minister Andrew Barr on radio this morning “ACT ignored, not attacked” – we can probably at least be relieved about that.

The only growth industry in Canberra is the ACT Labor/Greens Govt finding new ways to gouge $ out of the back pockets of ACT ratepayers, homeowners, vehicle owners, etc.

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