In this special report, BBS Communications Group Director Matthew Hart provides a detailed review of the 2013-14 Federal Government Budget.
The 2013-14 Federal Budget marks the end of a tumultuous financial year in Australian politics, as Julia Gillard and Wayne Swan hand down what could be their last budget. During the past six years, the Government had focused on returning the budget to surplus this financial year. However, as recent months unfolded, it became clear this would not be delivered and instead has been promised for 2016-17.
The 2013-14 Budget is widely recognised as Prime Minister Gillard’s last attempt to win significant votes ahead of the September election, and is a clear representation of ‘Labor values’.
Several commitments made in the 2012-13 Budget have been either cancelled or deferred as the Government balances its priorities.
The important numbers
After last year’s substantial changes to personal income tax rates, this year the Government opted to maintain the status quo. Additionally, the planned increase to the tax-free threshold in 2015 will now be deferred due to the falling global carbon price and the subsequent loss of Government revenue.
Corporate tax loopholes are in the Government’s sights, with $4.2 billion projected to be saved over four years. Large multinationals are being particularly targeted with rules regarding companies’ ability to shift profits to countries with lower taxes being tightened.
There are no changes to negative gearing or capital gains tax.
The announced changes to the taxation of superannuation will deliver a smaller saving than previously expected – $821 million over four years, rather than the $900 million that was initially hoped for.
The Government will impose a 15 per cent tax on earnings above $100,000 from retirement accounts, with people earning more than $300,000 a year to pay 30 per cent as opposed to the 15 per cent paid by everyone else.
It’s not all bad for superannuation however, with up to $500 being provided for people earning less than $37,000 to compensate them for tax paid on super at a cost of $15 million over five years.
Infrastructure, Property and the NBN
Infrastructure was one of the winners in this Budget, with $24 billion committed to the next wave of major projects. This will see the total investment sit around $60 billion between 2008-09 and 2018-19.
The spend lies not only in metropolitan locations, but with a significant focus on delivering infrastructure to regional Australia. There is a push to encourage greater private sector involvement in providing infrastructure to the nation, with the Government using the Sydney’s F3 to M4 road project as the leading example.
Major metropolitan budget initiatives include:
A very quiet budget for the property sector, with:
The main property initiative in this Budget was the $112 million trial program to assist the elderly to downsize their homes, with no effect on their pensions, via a means test exemption of up to $200,000 for ten years.
A $100 million investment in natural disaster mitigation designed to lower insurance premiums was also featured.
As the single largest infrastructure project in the nation’s history, fibre rollout to more than 4.8 million premises is scheduled to be underway or completed by mid-2016.
The budget has promised greater competition for Australian businesses at national and international level with the delivery of NBN.
Digital Budget initiatives:
Transport infrastructure was one of the big winners this year, with $24 billion in funding allocated to road, rail and port projects across Australia. The Government has expanded investment into urban regions in a bid help relieve congestion and improve liveability in Australia’s major cities.
Funding has also been allocated for two key urban public rail projects: Brisbane’s Cross River Rail and the Melbourne Metro. Brisbane’s Cross River Rail could be given the green light following the announcement of $715 million in Federal Government funding, despite this only covering around 25 per cent of the entire project.
These projects have been targeted to significantly increase rail capacity and reduce the traffic grind that commuters face every day in Melbourne and Brisbane.
Key initiatives include:
Matthew Hart is a Director of BBS Communications Group in Brisbane. At BBS, Matthew has managed the media relations and communication activities of high-profile national clients, including Eagle Boys Pizza, Delfin Lend Lease, Early Learning Services, and Retail Food Group. Matthew is also a key member of the BBS media training team and has trained executives from the likes of Queensland Rail, Stanwell Corporation, Surf Lifesaving Queensland and Griffith University on the art of handling positive and negative media inquiries.