Last night the Abbot Government’s first Federal Budget was revealed and, far from the pre-poll promise to cut the nation’s net debt without dishing out huge taxes, the changes are set to see a lot of Australians tightening their purse strings.
We dissect what the budget means for you…
By Chloe Schneider
FAMILIES
There’s some good news and some bad for parents…
Under new eligibility requirements, many single-income families will no longer receive the Family Tax Benefit B. From July 1, 2015 threshold here will be reduced from $150,000 to $100,000 and the supplement will no longer be paid to families once their youngest child turns six.
Low-income single parents received a rare win with a new supplement that will provide an extra $750 a year for each child aged between 6 and 12.
Two family benefits are taking cuts — Family Tax Benefit A end of year supplement will be reduced from $726.35 to $600 while Family Tax Benefit B end of year supplement will be reduced from $354.05 to $300.
For any families receiving Tax Benefit A, the maximum income threshold before losing any of the base rate is now capped at $94,316 no matter how many kids you have.
The Childcare rebate remains at $7,500 per child.
If you’re planning on having a baby, you just might want to keep up the contraception until after July 1 next year… At that time, Tony Abbot’s much talked about Paid Parental Leave scheme will come into play, granting new mums a maximum salary of up to $50,000 over six months.
HEALTH
From July 1, 2015, you will have to pay a $7 “patient contribution” fee every time you visit a GP. In addition, you will be charged for visits to out-of-hospital pathology and imaging services (including X-Rays and MRIs).
Should you require a prescription, you’ll most likely incur a $5 prescription fee for each script filled — this will apply to any prescription subsidized by the government’s Pharmaceutical Benefits Scheme.
There are some exceptions to the new rules; concession card patients will only have to pay the patient contribution for the first 10 visits a year and will only incur an extra 80c on their prescription costs. Doctors do have discretion to choose who pays the fee, but if they choose not to charge, they won’t receive their $6.20 bulk billing consultation payment from the government.
JOBS
A huge 16,500 public servant jobs will be lost over the next three years with 230 bureaucratic programs and 70 government agencies axed. Part of this will include consolidating administrative functions at Canberra-based agencies like the National Gallery, and National Library.
Australian Tax Office worker will also experience a loss, with 3,000 jobs set to be cut.
PETROL PRICES
No surprises here, petrol prices are set to jump. From August 1 this year, the government will reintroduce the twice-annual indexation of furl excise to the Consumer Price Index.
The $2.2 billion that is expected to be amassed over the next four years as a result will go towards our roads with an extra $229 million for updating highways, $200 million to reduce black spots, $350 million for the Roads to Recovery program, and $2.9 billion in building key highways.
HIGH INCOME EARNERS
If you’re earning more than $180,000 a year, you’ll be paying a new debt levy for the next three years, starting July 1.
The silver lining on this is that every member of federal parliament will pay some of the levy — the base backbencher salary is $195,130.
EDUCATION
Education has taken it hard — the government plans to decrease its contribution towards University course fees by an average of 20 per cent, meaning that by January 2016 students will have to pay more.
In a move that sees Australia moving towards the US system, Universities, TAFEs, and collleges will also be able to set their own fees from this date, driving up the cost of some courses even more. PhD students will also have to pay an extra contribution towards their degree.
The only silver lining here is that universities will have to contribute $1 out of every $5 of additional revenue they raise through fees to a new Commonwealth Scholarships scheme to help disadvantaged individuals study.
If you’re already a student, July 1, 2016 will see you begin paying HECS earlier with the threshold seet at $50, 638. Interest rates on HECS debts are also taking a significant hit.
PENSIONERS
The Pension age will be increased to 70 from 2035, as foreshadowed by the government.
Anyone who is under 35 and received the Disability Support Pension between 2008 and 2011 will be forced to go through tougher eligibility tests and may even be required to join Work for the Dole, job search, education, training or work experience schemes.
Those receiving the DSP will only be allowed to spend four weeks a year overseas to remain eligible.
Nothing much will change by the way of retirement for the next three years, but after that the income and threshold test will change significantly. From September 2017, the government will reset the deeming thresholds from $46,600 to $30,000 for singles and from $77,400 to $50,000 for couples.
Thankfully, the public’s fears have not been recognized and the government will not include the family home in the means test.
If you’re over 50 and working, you’re in luck as the government introduces an incentive for employers to hire and keep you. This comes in the form of a wage subsidy at the cost of $304 million over four years from July.
Employers will receive $3000 after six months of employment, $3000 after a year of employment, a further $2000 after 18 months and another $2000 after two years.