Budget night: Joe Hockey and Prime Minister Tony Abbott Photo: Andrew Meares
Federal Treasurer, Joe Hockey, has handed down his first Federal Budget and Tony Abbott's government of "no surprises" has proven that it does indeed have some "gotcha" moments in store. According to the government, the budget contains more structural reform than ever before ... but what does it mean for parents?
Here's a quick rundown of the main points:
FTB A & B. The (roughly) $20 billion spent on family tax benefits is also under the microscope, with the government freezing family assistance rates for two years. The FTB B income threshold will also be reduced to $100,000 and payment will no longer be available when the youngest child turns six. For for a typical family receiving the base rate of FTB A, payments will start to reduce when family income exceeds $94,316 per year.
Current Paid Parental Leave (PPL) scheme: The PPL scheme is Tony Abbott's pet policy - but in late April, he announced his intention to reduce the income threshold for the scheme from $150,000 to $100,000. As such, the maximum PPL entitlement will be capped at $50,000 over six months.
Thinking of becoming a mature-age student? Choose your course carefully! The government has announced that university fees will be deregulated from 2016 which will lead over time to higher costs. In addition:
- Commonwealth funding extended to students at TAFEs, private colleges and sub-bachelor degrees at a cost of $820 million over three years
- Labor's 'Gonski' school funding commitments scrapped from 2017-18 with school funding indexed to inflation from 2018
- School chaplaincy program continued at a cost of $243.5 million over five years
A GP fee will be introduced. Bulk-billing will no longer be free for many, with the government announcing a GP co-payment of $7 per visit (with safety net provisions for concession card holders and children)
- General patients to pay $5 more and concessional patients 80¢ more for prescription drugs.
- Billions slashed from hospitals, which will be free to charge for emergency department
- These savings will help pay for a $20 billion Medical Research Future Fund
Cost of living
The cost of fuel will jump. The current fuel excise collected by the government (currently 38 cents per litre) will rise with indexation twice each year.
Reduction in instant write off: For parents who run their own business, it's worth noting that the current instant tax write-off for depreciating assets up to $6,500 will fall too just $1,000 from July 1.
Deficit tax for high income earners
The much-debated deficit tax, leaked to the media a while back, will apply from 1 July 2014 at a rate of 2%, to those earning a taxable income above $180,000. This temporary levy will remain in place for three years.
While it won't affect all that many parents, another budget announcement was the requirement for those who are unemployed and under age 30 to wait for six months before being eligible for Newstart, and then being required to work for the dole
Increase in retirement age.
When all is said and done - and paid - the good news is that you will have a longer working life to fund it all. The government has announced that the eligibility age for the age pension will increase from its current level to age 70, occurring gradually over two decades, to be fully implemented in 2035. The rise in age pension payment rates will also now be linked to inflation rather than average weekly earnings. There will also be a future freeze in assets test thresholds.
While it is largely a budget of cuts, the government has exhorted the public to look beyond self-interest and embrace the changes for the good of the nation. Do you think the changes are fair? Comment below.