Julia Gillard’s Australian Federal Government released their budget for the 2013-14 year on Tuesday 14 May 2013. The Australian government’s budget like so many around the world, including New Zealand, is aimed at returning the Australian Government’s books to a surplus.
There were two key themes for this budget, the first was to produce $43 billion in savings and extra revenue over the next 10 years to get the government books back into surplus. The second theme was to continue the government plan to fund nation building infrastructure and reforms.
The Australian federal government announced an estimated $18 billion deficit for 2013-14, due to lower tax takes from corporate Australia, including the failed mining tax which raised just $126 million before it was cancelled. This decline in the tax base is mainly due to the difficult global conditions and the sustained high Australian dollar which are weighing heavily on profits of Australian businesses.
The Australian government has responded to this estimated deficit (A$19.4 billion in 2012-13 and A$43.4 billion in 2011-12) by setting a path to returning to a surplus by 2016-17, to do this the Australian government through this Budget delivers A$43 billion in savings and extra revenue to return the budget to surplus. The main announcements are:
- The removal of the baby bonus, which paid A$5,000 for each new born baby.
- Introduction of means tested family tax benefits for families earning up to A$118,000.
- The withdrawal of a family tax benefit increase of A$300 to A$600.
- Closing business tax loopholes, which is estimated to raise an extra A$4.2 billion.
- A 0.5 percent increase in the Medicare levy, which will raise an estimated A$11.5 billion to fund the National Disability Insurance scheme.
- Taking back research and development assistance provided to companies with $20 billion plus turnover.
This budget has continued to fund nation building infrastructure and reforms, and after spending A$73 billion so far for new infrastructure, including $37 billion on a national broadband network, this budget will provide the following:
- A$9.8 billion over six years in once-in-a-generation school reforms to enhance Australia’s future productivity and wellbeing.
- Committing to the next wave of vital infrastructure investment, bringing the Government’s total investment to around A$60 billion from 2008-09 to 2018-19.
- This Budget provides funding for two key urban public rail projects. This includes $715 million for Brisbane Cross River Rail and $3 billion for Melbourne Metro.
- A$1 billion investment in boosting Australian innovation, productivity and competitiveness under A Plan for Australian Jobs.