In a repeat of last
year's pre-budget message, we had again been warned of a tough
A high Australian dollar and slowing global economy has
certainly impacted heavily on Labor's sixth budget, with the
Government giving up any hope of a return to surplus in favour of
funding the main Labor initiatives of the Gonski school reforms,
the DisabilityCare program, the National Broadband Network (NBN),
and the Nation Building Projects (Road and Rail).
Businesses eagerly awaited to see whether the Government was
able to come up with a visionary plan for the future to help the
economy grow and to turn around the declining revenue collections.
Other than the incidental stimulus from the above four initiatives
there was nothing major to kick business along. The crackdown on
perceived loopholes that are supposedly being exploited by
multinationals (such as the thin cap reform) will be a drag
Many of the budget's major spending initiatives were
announced in the lead up to the budget, such as:
DisabilityCare $68 billion over 10 years
School Education $26 billion over 10 years
The Government had also previously announced that these measures
were to be largely funded through:
An increase in Medicare levy of 0.5% of $3.3 billion a
Cancellation of the increase to Family Tax Benefit Part A -
$1.8 billion over three years (originally was to increase by $300
for those with one child and $600 for those with more.)
Deferred tax cuts for carbon price compensation $1.4 billion
(Carbon tax was expected to bring in $2 billion in the first year,
yet in the first six months it only brought in $126 million.)
Interestingly, new laws will be introduced to help Australian
firms win more work by introducing a requirement for an Australian
Industry Participation Plan for any project in Australia worth more
than $500 million and a new anti-dumping commission.
It will be interesting to see how many of these budget
announcements will see the light of day after the Federal
Because of the high costs, royal commissions should only be convened to address issues of substantial public importance.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).