Federal Budget 2012: what does it mean for you?
09 May 2012
Federal Treasurer Wayne Swan’s 2012 budget announcement has met expectations and predicted a budget surplus of $1.5 billion (0.1 per cent of GDP) for the 2012/2013 financial year, with further budgetary surpluses expected for the following four years.
Should the surplus be achieved, it will be the largest single-year recovery to the budget’s bottom line since 1952/53.
“This is a clever budget, but it is by no means a horror budget,” said Savanth Sebastian, Economist at CommSec.
“Although there will be little in the way of new spending in 2012/2013, the main winners from this year’s budget are low income families with school children, who will receive the SchoolKids Bonus. The government has also announced funding for a new Disability Insurance Scheme and a new Dental Health Scheme.”
To help Australians better understand how the latest Federal Budget will affect them, Commonwealth Bank has today launched a dedicated online resource featuring expert commentary and analysis from the Bank’s team of leading economists.
The site, found at www.commbank.com.au/federalbudget, houses detailed reports and a series of video insights to help break down how the Federal Budget stands to affect you.
Mr Sebastian said although Mr Swan has outlined a dramatic turn around in the Federal Budget, there were surprisingly few, if any, nasty surprises in this year’s announcement.
“The government has been able to achieve a surpluses through policy decisions, which will see an increase to the budget bottom line of $5.8 billion in 2012/13,” said Mr Sebastian.
Budget savings will come from areas such as changes to living away from home allowances available for some workers. Those travelling overseas will pay an extra $8 in departure tax and the number of duty free cigarettes travellers will be allowed to bring into the country will drop from 250 to 50 cigarettes, initiatives designed to lift government revenue.
High income earners will no longer receive tax concessions on superannuation contributions. Plus the government has decided to defer higher concessional contribution caps for individuals over 50 with superannuation balances below $500,000 to 1 July 2014, increasing cash receipts by $1.4 billion over the four years to 2015/16.
The government also confirmed the $1.75 billion National Partnership Agreement on Skills Reform agreed at COAG in April this year will go ahead. It will also invest an additional $225.1 million in Jobs, Education and Training and Child Care Fee Assistance and $101 million in new skills measures to better support mature age workers.
A key part of this year’s budget has been initiatives to reform the health system, with the Federal Treasurer announcing spending initiatives of $61 billion in 2012/13 for Australia’s health care system. The government has put aside $515.3 million to improve dental services and strengthen the future dental workforce and announced 76 new regional health infrastructure projects across Australia worth $475 million. There will also be an additional $19.8 billion in reforms to public hospital funding over the period to 2019/2020.
“Mr Swan has delivered on his promise to restore the budget to surplus, which will help to reduce the pressure of the mining boom and provide protection to the Australian economy if there are further shocks in the global economy,” said Mr Sebastian.