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Federal Budget 2018: What it means for families

Federal Budget 2018: What it means for families

The Federal Budget 2018 put the spotlight on essential services, including electricity, childcare, education and healthcare.

The impact on families is a major consideration of the Federal Budget. Treasurer Scott Morrison spoke to education, healthcare and tax reform.

In his speech, the Treasurer committed to “guarantee the essential services that Australians rely on” and “provide tax relief to encourage and reward working Australians and reduce cost pressures on households, including lowering electricity prices”.

Education and child care

As part of the Budget, the Treasurer proposed that families on incomes of around $187,000 or less a year would not have an annual limit on the amount of Child Care Subsidy received, when the New Child Care Package comes into effect from 2 July 2018.

For schools, there would be a 50% average increase in per-student funding over 10 years and permanent funding for the National Schools Chaplaincy Program with a new anti-bullying focus. The Parental Income Test for access to Youth Allowance for independent students would be relaxed by an additional $10,000 per annum and an additional $10,000 for each additional child from 1 January 2019.

The Treasurer also said the Government will support the recommendations of David Gonski’s Review to Achieve Educational Excellence in Australian Schools.

Healthcare

The Budget included proposed new and amended items on the Medicare Benefits Schedule, including cystic fibrosis testing, 3D breast screening and MRI tests for prostate cancer.

There was also a proposed $20.9m in funding to support parents and infants for tests for new conditions and to ensure debilitating conditions are picked up early.

Other measures outlined were increases in access to medicines to treat spinal muscular atrophy, breast cancer, refractory multiple myeloma, relapsing-remitting multiple sclerosis, and a new medicine to prevent HIV.

Income tax

The Treasurer highlighted an intention to create “tax relief for low and middle-income earners”, meaning Australians earning up to $37,000 who are paying 19 cents in the dollar would have their tax reduced by up to $200. Those earning more than $37,000 paying 32.5 cents per dollar would have their tax reduced by a maximum of $530 per year.

A previously announced increase in the Medicare Levy from 2% to 2.5% was scrapped.

The Budget also proposed increasing the threshold for the 32.5% tax bracket from $87,000 to $90,000 and making more substantial changes in 2022-2023.

Energy bills

The Treasurer announced the National Energy Guarantee, which includes a focus on the affordability of energy with the intention to provide an average $400 discount on the average Australian household’s electricity bills annually.

Keep in mind 

Any changes outlined in the Federal Budget must be passed by both the House of Representatives, which is controlled by the government, and the Senate, where proposed expenditures are subject to examination within Senate estimates hearings. This means any proposed cuts or changes outlined above may not necessarily become law.

Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information.

This article is intended to provide general information of an educational nature only. It does not have regard to the financial situation or needs of any reader and must not be relied upon as financial product advice. Taxation considerations are general and based on present taxation laws and may be subject to change. You should seek independent, professional tax advice before making any decision based on this information. Commonwealth Bank is also not a registered tax (financial) adviser under the Tax Agent Services Act 2009 and you should seek tax advice from a registered tax agent or a registered tax (financial) adviser if you intend to rely on this information to satisfy the liabilities or obligations or claim entitlements that arise, or could arise, under a taxation law.