The theme of Scott Morrison’s first budget was tax cuts for business and “growth of jobs”. The old mantra of “ensuring the Government lives within its means,” made a reappearance so as “to balance the budget and reduce the burden of long-term debt”. While the Coalition is claiming to go after tax avoidance of multi-national companies.The coalition has declared it will attack “welfare abuse” and will guarantee real and affordable funding for education.
The Treasurer announced a 1.5 percentage point reduction in the tax rate for small businesses with a turnover of less than $2 million per year. From 1 July this year, the small business tax rate will be lowered to 27.5% and the turnover threshold for small businesses able to access it will be increased from $2 million to $10 million.
In an attempt to fight bracket creep from 1 July this year, the upper limit for the middle-income tax bracket will be increased from $80,000 to $87,000 per year. The Treasurer claims this will stop around 500,000 taxpayers from facing the 37 per cent second top marginal tax rate in each and every year.
The Coalition has also officially confirmed that negative gearing will not be removed or changed.
Funding for infrastructure projects were also announced such as, the Government will also establish a $2 billion Water Infrastructure Loan Facility, which will catalyse new investment in dams and pipelines across Australia, building on the existing National Water Infrastructure Development Fund and the Northern Australia Infrastructure Facility.
Around 180 other major projects are under construction or in the pre-construction stage, including the Midland, Bruce and Pacific Highways. In this Budget, the Government is adding new commitments for the Ipswich Motorway, Monash Freeway, Murray Basin Freight Rail and the Perth Freight Link.
The Government has finalised or committed to agreements with four states and territories under the Government’s Asset Recycling Initiative, worth $3.3 billion, which will catalyse $23 billion in additional infrastructure investment in projects including the Sydney and Melbourne Metro projects, light rail in Parramatta, regional road and rail freight corridors across NSW and Victoria, and flood mitigation works in the Northern Territory.
The Government has also established a program to get unemployed young people into work. Businesses that take on participants in the new program will receive an upfront payment of $1,000 while participants will get an $200 per fortnight on top of their regular income support payment while participating in the internship.