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The ‘kiss and make up’ Budget

HerCanberra Team

Making the country fairer is the underlying test of every Budget, and that has nothing to do with balancing the books and everything to do with balancing the interests at play.

It is the minefield that every Treasurer must navigate with precision and consideration – an arrogant misstep can recast political fortunes, detonate political capital, swing the electorate, trip up the economy and fray consumer confidence.

That is the situation we have all lived with since the last Budget. A ‘here we go again’ political leadership merry go round, a flattening economy, fickle consumer confidence and daily headlines of the annoyed from farmers, to mothers, to battlers, to business – small and large.

Something had to give – literally.

And give it did – last night’s Budget in totality is the largest stimulus to the national economy since the Global Financial Crisis in 2008.

It is an about face, no doubt informed by the delicate advice from many of Canberra’s public servants who are keen to see a Budget that resonates with the public, not just one which conforms to the party room expectations.

On the surface you may not see your particular situation in a tax cut, incentive, payment or program but a stimulus of this scale has the potential to positively impact our local region, as local rural and small businesses are encouraged to spend and grow.

Canberra is also poised for this kind of investment and the entrepreneurial diversification it can inspire.

We take a quick look at what this means for Canberra, through the lived experiences of families, public servants, small businesses and pensioners.

If you’re a family, mother with young children or expecting a child

What was announced:

A boost to childcare, access to the Child Care Subsidy, a single benefit, those earning less that $65,000 will see 85 per cent of child care fees subsidised but this reduces to 50 per cent for families earning $170,000 or more.

Stay at home parents will lose access to childcare rebates while mothers with access to workplace maternity leave schemes will no longer be able to access the Federal Government’s Paid Parental Leave program.

Change in positions:

  • The previous “unfair” budget included a loophole which allowed new parents to essentially “double dip” and receive both the Commonwealth paid parental leave scheme as well as similar benefits from their employer. The government intends to direct the savings generated by closing this loophole towards the new Families Package.
  • The government is changing the way drugs are included in the pharmaceutical benefits scheme, removing original brand name drugs from the price disclosure regime.

Backdowns:

  • The government’s paid parental leave scheme that was made much of in the 2014-15 Budget has been scrapped. The complex, overlapping system of child care benefits and rebates contained in the last Budget is being overwritten by the new Families Package.
  • The complicated system in the 2014-15 Budget has replaced this system with one simple payment that is linked to the number of hours worked.
  • The government has also incorporated an $800 million a year safety net to ensure the most disadvantaged families have access to child care.

If you’re a …public servant in Canberra

What was announced:

It is probably more what wasn’t announced – more job cuts to the public service. The 16,500 job losses slated in last year’s Budget have been delivered well ahead of schedule signalling a subtle ease to the hiring freeze but a likely constrained growth for future pay rises.

If you have…parents receiving the pension

What was announced:

New thresholds for the asset test to apply for the pension which includes lowering the ‘family home’ asset test for single pensioners to $550K.

Change in positions:

  • The government is making changes to the terms of early access to superannuation to the terminally ill. People diagnosed with two years to live will now be able to access their superannuation. Previously, this initiative was restricted to the terminally ill under 65, and only if they are diagnosed with 12 months or less to live.

Backdowns:

  • The previous budget included a plan to index the pension to inflation. This has now been scrapped. The assets test will be altered to limit eligibility by changing the assets test. Rather than focus on average weekly earnings, this change will reduce the threshold at which the part pension cuts out, reducing the number of the wealthiest retirees which qualify.

If you…own a small business

What was announced:

If you own a small business with an annual turnover less than $2 million, your tax rate just got lowered by 1.5 per cent and you are immediately eligible for a tax deduction of all assets up to the value of $20,000.

Change in positions:

  • The Government’s Jobs and Small Business package will include allowing start-ups to write off company setting-up costs immediately instead of over a five-year period.
  • The government will also alter business structures without capital gains tax being incurred.

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  • Nik

    It is all well and good to provide changes to the child care subsidy but when you have been on some wait lists since you were 16 weeks pregnant and your child is almost 18 moths old and you still don’t have full care it isn’t really that helpful.

    By cutting the ‘double dipping’ (a term I think is misguided and awful, as though mother’s are taking advantage of a system that was designed to COMPLIMENT your paid mat leave if you got it) how are women meant to go back to work within the 14 weeks paid mat leave they get from their work when there are no flipping care places? Where does the baby go? Or do women just have to take unpaid leave?

    I only took 4 months off with my child before returning part time (couldn’t get fulltime care and also wanted to be with my new baby) 14 weeks was paid by my employer and an additional 4 I took from government pay, I couldn’t have afforded to have those additional weeks and would have been stuck financially if the minimum wage wasn’t available. Redirecting the money ‘saved’ from parental leave to child care works in theory except in two instances 1). What happens when there is no care available in your area or near your workplace? 2). 14 weeks (standard for most govt departments at least) is a pretty short time to recover physically and mentally from the birth of a child.

    People voted these jerks in on their ‘promises’ one of which was a paid parental leave scheme at current salary of 26 weeks. To lose that I was ok with (felt it was a bit unrealistic) but now to be put in a WORSE position than before?! A total back flip, claw back, broken promise. I know this has certainly changed my family planning and I am heavily disappointed about it. I’m sad and angry and only hopeful that the disjointed senate won’t let this pass through…

    • I completely agree with you. I hate the fact that it’s being referred to as a ‘loophole’ when in actual fact it was designed that way. Instead of vilifying mothers who are able to access the WHO recommended levels of maternity leave (through a combination of employer and government benefits) why don’t we look to ensuring all women have similar access to paid time off to properly bond with their babies?

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