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Federal budget - what we know so far

Date

Madeleine Heffernan

Interest rates are falling, unemployment is rising, Labor in on the nose, and the Gillard government is attempting the biggest fiscal turnaround in decades - setting the stage for an extraordinary federal budget.

But some things stay the same. Observing a time-honoured tradition, the government has been busy leaking key budget decisions.

Here's what we've gleaned so far about the 2012 federal budget:

  • The introduction of a "loss carryback" option for small business. Recommended by the Henry Tax Review, the carryback plan allows businesses to claim losses of up to $1 million against tax they have paid in the previous two years. It is forecast to cost $700 million over three years and is designed to stimulate SMEs in the slow end of the economy.
  • A company tax cut of 1 percentage point to 29 per cent, assuming it gets through Parliament.
  • Cash payments for parents. The "Schoolkids Bonus" will give $820 for parents with teenagers at school and $410 for parents of primary school students. It will be given to recipients of Family Tax Benefit and does away with the need to keep education-related receipts.
  • Pushing 100,000 sole parents off parenting payments and on to Newstart when their child turns eight, delivering $700 million in savings over four years. This will mean welfare cuts of up to $60 a week for recipients.
  • Welfare payments for people travelling overseas for more than six weeks will be cut.
  • Billions of dollars in savings from the defence budget.
  • The superannuation contribution tax will be doubled to 30 per cent for people on incomes above $300,000.
  • The living-away-from-home allowance for executives will be cut, saving $1 billion.
  • Job cuts for the public service.
  • Funding for the national disability insurance scheme, earmarked to start next year.
  • Changes to aged care funding, as detailed in its recent aged-care report.
  • About half a billion for dental care.
  • Cuts to green schemes, to avoid duplication with the carbon tax.
  • $3.5 billion in funding to finish the Pacific Highway dual carriageway.

And what is speculated:

  • Changes to housing - will the government take steps to prop up the market?
  • Support for the manufacturing industry.
  • An end to the 32 cents a litre diesel fuel rebate.
  • A skills package encompassing apprenticeships and vocational skills.  

mheffernan@fairfaxmedia.com.au

 





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