At 7:30pm tonight, Wayne Swan delivered his 6th budget with a forecast budget deficit of $18 Billion for 2013-14, $11 Billion for 2014-15, a balanced budget for 2015-16, and a return to surplus in 2016-17. The budget deficit for 2012-13 is $19.4 Billion compared to the previously forecast $1.5 Billion surplus in last year’s budget. The main objectives of this budget are “to keep the economy strong and invest in the future” and “to charter a pathway to surplus through substantial savings.”
Key Forecasts
- 2.75% GDP growth is expected for 2013-14
- 3% GDP growth is forecast for 2014-15
- 5.75% unemployment is expected for 2013-14 and 2014-15, and 5.25% for 2015-16
Key Changes
The key changes announced in the budget that impact on individuals, families, and business are:
- From 1 July 2014, the Medicare Levy will increase from 1.5% to 2% to fund the National Disability Insurance Scheme
- From 1 March 2014, the $5,000 baby bonus will be scrapped and replaced by a $2,000 supplementary payment to families who receive Family Tax Benefit Part A (families with income up to $112,000)
- From 1 July 2014, self education expense deductions will be capped at $2,000 per year
- The Family Tax Benefit payment amount will be frozen until 1 July 2017
- The upper income threshold for receiving Family Tax Benefit Part B (single income earner families) will be frozen at $150,000 for 3 years
- PAYG income tax instalments for businesses will be payable monthly instead of quarterly
- The previously planned increase in the tax free threshold to $19,400 from 1 July 2015 will be scrapped
- From 1 July 2016 a 10% withholding tax will apply to capital gains made by non-residents from Taxable Australian Property
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