Federal Budget 2019: Your cheat sheet to understanding where the money's going

Updated

This Budget doubles as a campaign launch for the federal election while also revealing the Coalition's key campaign messages: big tax cuts and new roads for the regions.

It also ensures the Morrison Government matches Labor's tax cuts while narrowing the gap on other pledges and appealing to the owners of small and medium businesses.

So, what's in it for me?

You could be getting double the amount of money you expected when you file your next tax return.

Last year, low and middle-income earners were promised a tax cut of $530 from July 1.

That will nearly double to $1,080. A dual-income household will save $2,160.

About 4.5 million Australians will receive this tax cut. This is broadly in line with what Labor has promised.

So, no matter which party wins the election, there's more money coming your way at tax time.

This is going to cost the Government big time. It'll be a $19.5 billion hit to the budget bottom line over four years, or $158 billion over 10 years.

What about that surplus?

Almost, but not quite.

Some economists thought the Budget might scrape back into black this year, but it's been written down as a $4.2 billion deficit.

That's partly due to a pre-election cash splash.

The Treasurer says the budget will record a healthy $7.1 billion surplus next year, but that will depend on factors outside the Government's control, like the global economy.

Prepare for road works

Queensland and Victoria are the biggest winners from a huge infrastructure spend.

Nationally, the Coalition has promised a $100 billion spend over 10 years.

In Victoria, there's $6.2 billion worth of projects, including $2 billion for fast rail between Melbourne and Geelong in the ultra-marginal seat of Corangamite, held by the Liberals.

Income Tax cut from 2018-19 Tax cut from 2022-23 Tax cut from 2024-25 $30,000 $255 per year $255 per year $255 per year $60,000 $1,080 per year $1,080 per year $1,455 per year $90,000 $1,215 per year $1,215 per year $2,340 per year $120,000 $315 per year $2,565 per year $4,440 per year $150,000 $135 per year $2,565 per year $6,540 per year $180,000 $135 per year $2,565 per year $8,640 per year

In Queensland, there's close to $4 billion in new projects, including the Bruce Highway ($425 million), the Gateway Motorway ($800 million) and the Warrego Highway ($379 million).

These two states are seen by many analysts as key to the federal election, with many marginal seats.

Nationally, there's $500 million for a "commuter car park fund" that will improve access to key public transport hubs, getting more cars off our roads.

Let's talk business

Small and medium-sized businesses are a winner in this Budget.

For the first time, medium-sized businesses with a turnover of up to $50 million will be able to instantly write off assets.

The threshold for these assets has also been increased from $25,000 to $30,000.

This will cost the Government $400 million over the next four years.

Businesses will also be given a $4,000 incentive to hire apprentices in industries with skills shortages like baking, bricklaying, carpentry and plumbing.

Apprentices will also get $2,000 when they hit key milestones.

What about revenue raising?

Two big new things. The Government will automate social security payments.

Departments will increase data sharing to ensure there are fewer overpayments to welfare recipients.

The Coalition expects this to save $2.1 billion over five years, with this money earmarked for budget repair.

The Coalition insists payments won't be cut, just properly administered. The Government will beef up its multinational tax avoidance team.

The Coalition will invest $1 billion over four years but expects to get $3.6 billion back over the same period.

Health

The Government will end the indexation on Medicare rebates a year earlier than planned. This matches what Labor has promised to do, if elected.

This will make it cheaper to access 119 GP services, and cost the Federal Government $187 million.

There's $448 million for a new primary care funding model aimed at people living with complex and chronic conditions.

New drugs will be listed on the PBS costing $331 million over five years.

This includes a number of new leukaemia drugs that have been recently listed, or will be in coming months.

Early education

Labor has been very critical of the Coalition's early childhood policy and has pledged to do more to boost access to early education for three-year-olds.

With an election looming, the Morrison Government has announced it will support an extra 15 hours of preschool each week — or 600 hours per year — for children who start school in 2021.

Border security, at what cost?

The Government hasn't put any money aside for the Christmas Island detention facilities beyond July 1, 2020.

These facilities were opened after the medevac legislation passed Parliament. The lack of funding is because the Coalition is promising to repeal the laws in the next term of government.

Only $23 million has been set aside for next financial year, which could indicate the Government believes the facility won't be required over the long term.

Topics: budget, government-and-politics, federal-government, business-economics-and-finance, australia

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