Business and Finance Federal Budget Overview
by Craig Coetzee
The new financial year has just begun. In May, Federal Treasurer Wayne Swan, delivered the Governments budgetary agenda for the 2008-09 financial year.
The first since the change of Government, many Australian families were hoping for some fairly significant changes to the priorities of this years budget specifically, towards helping working families.
Here are some highlights from this years Federal Budget.
Help address the problem of skill shortages, as well as the challenges of the aging population by increasing the Skilled Migration Program by an extra 31,000 places.
Ensure long-term funding for hospitals, medical technology and research facilities through the establishment of a Health and Hospitals Fund, with an initial allocation of $10 billion.
Invest $12.9 billion into a 10- year national water policy framework, including $1 billion in funding to attract investment in desalination and water recycling projects and $250 million for the installation of rainwater tanks and other water saving measures.
Invest $2.2 billion over five years to better protect, manage and improve the quality of our environmental systems and natural resources.
Spend a total of $55 billion on the working families support package, which includes:
$1.2 billion over four years to assist first home buyers to save for a home, by the introduction of first home saver accounts;
$623 million over four years to the national rental affordability scheme, to encourage the construction of affordable rental housing;
$46.7 billion over four years towards personal income tax cuts to ease the burden on working families; and
Increase the child care rebate from 30% to 50% to ease the burden of child care costs.
In terms of tax?
The Federal Budget also outlined the Governments plans to deliver the promised personal tax cuts and introduce other related tax measures including:
Amend the 30% threshold from $30,001 to $34,001 from 1 July 2008, to $35,001 from 1 July 2009 and to $37,001 from 1 July 2010;
Reduce the second highest marginal tax rate from 40% to 38% from 1 July 2009 and to 37% from 1 July 2010;
Set a goal over the next six years to reduce the number of tax rates from four to three with a personal income tax scale of 15%, 30% and 40%;
Increase the Medicare levy surcharge thresholds for singles from $50,000 to $100,000, and for couples from $100,000 to $150,000;
Baby bonus to be increased to $5,000 (indexed annually), and be income tested. The baby bonus will be paid in fortnightly instalments rather than a lump sum payment.