Budget 2014 – What it means for you The Abbott Government warned us that its first budget would be tough. What Treasurer Joe Hockey calls a “budget repair” makes a number of cuts, introduces tax hikes, fees and tighter welfare rules in a call for Australians to “contribute and build”. But what does this mean for you? Here is a general summary of the key points: • Are you a senior? If you were born in or after 1965, the pension age for you is rising to 70 by 2035; new indexation arrangements from 2017 To restart the careers of older people receiving a benefit, businesses will be paid a $10,000 wage subsidy if they give a job to a worker over 50 • Are you under 30 and unemployed? In an effort to get young Australians to “learn or earn”, people under 30 will have to wait six months to get unemployment benefits Additionally, under 25s not currently in the workplace will now receive a lower Youth Allowance benefit rather than unemployment benefits • Do you need to see a doctor? Even if your local GP accepts bulk-billing, you will need to fork out a $7 per visit fee this is capped at 10 visits per year for concessional and children under 16 starting from 1 July 2015 Cuts to health and hospital funding totaling $50bn over the next decade On the bright side, the Abbott Government is looking to the long term by investing in a $20bn Medical Research Future Fund to be paid for by these health savings with an aim to “underpin the health system of the future” • Do you earn over $180,000 a year? A deficit tax will now apply to high income earners for the next three years, starting 1 July If you have children Some families will be stripped of Family Tax Benefit B (eligibility threshold will be reduced from $150,000 to $100,000) starting 1 July 2015. The supplement will also no longer be paid to families whose youngest child turns six It’s not all bad news though, as low income earners will still receive a benefit until their children are 12 years old Paid parental leave and associated 1.5 per cent company tax rate cut (an election promise) not detailed • Are you a student? University fees will soon be deregulated, meaning that they’ll be able to set their own fees from 2016 The government will dump the Gonski school funding plan in 2017-18, saving around $30bn from the federal budget Graduates now have to repay their HELP debt earlier (lower minimum wage threshold) and with a higher interest rate However, universities will have to contribute 20% of fee revenue to a new Commonwealth Scholarship scheme to aid students from a disadvantaged background Other key points Deficit to be reduced to $49.9bn this year, $29.8bn next year and $2.8bn in 2017-18 $11.6bn to be spent on road, rail and port infrastructure Foreign aid slashed by nearly $8bn Fuel prices to rise twice per year We understand that everyone’s circumstances are different so please contact us for personal financial planning advice.
Posted on: Wed, 14 May 2014 05:47:48 +0000
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