While the Government’s new taxes on the mining sector and tobacco are central to bringing the budget back into deficit over the next few years, there are a lot of nasties in this budget in both cuts and taxes that will bring in a tidy sum for Wayne Swan. Here’s the top 10 with a few bonus ones at the end.
Child care rebate cap reduced: This is going to mean tens of thousands of families around Australia will be paying more for childcare - it’s that simple. The Government is set to reduce the cap on the annual Child Care Rebate from its current rate of $7778 to $7500. They will also pause of the indexation of the maximum that can be claim. This cut will save the Government a whopping $86.3 million in tax.
Increased fuel tax on ethanol: In the truly indecipherable language of the Rudd Government this has been named “an energy content-based fuel excise system.” This entails an excise on ethanol fuel of 25 cents per litre from 1 July, and will bring in a tidy $276.5 million over the next four years. The Government claims that this is to off-set the grant payment to domestic ethanol producers, which is to be reduced from 22.5 cents per litre from July 2011 to nothing by 2015. But interestingly this doesn’t mean that the tax will be abolished by 2015, with tax only go down to 12.5 cents over the same time period.
Green car innovation fund: This program was launched with much hoopla but has failed to switch into gear. Funding for the Green Car Innovation Fund will be cut by $200 million over the next three years, which the Government says is the fault of carmakers who failed to take up the offer of extra funding.
Cracking down on the disability support pension: From July 1 2011 the Government will introduce a new test for those on the disability that will be conducted by an allied health professional. This is the lead up to a bigger change which will take place in mid 2012 when: “claimants without sufficient evidence of a future work capacity of less than 15 hours per week may be referred to an alternative income support payment and offered employment assistance through Job Services Australia or Disability Employment Services.” Basically it will force more people off the disability pension, well the Government certainly hopes it will, cause they say it’s going to bring in $383.4 million over the next four years.
Going after cash-in-hand businesses: Well this is only a nasty if you’re on the wrong side of it. The Government is coming after all those businesses that prefer to deal in untaxed cash-in-hand. The Government is giving the Tax Office $107.9 million to wage the war, but are calculating they’ll end up making $366.5 million from it. The Government also hopes to bring in $2.7 billion in extra GST from businesses who aren’t lodging accurate GST tax statements.
Cuts to the AFP and ASIO: The $23.5 million cuts to the Australian Federal Police weren’t called as much in the budget papers, they were “identified savings” after an audit and are supposed to be retained by the AFP. The problem is there’s nothing indicating where that money is going, it’s just money saved and looks like a cut. Over at ASIO they’ll be feeling it too with $15 million worth of cuts over the next four years.
Cutting boys education initiative: Apparently a specialised education program for boys isn’t worth the bother. The Government is cutting the Boys Education National Initiative which will save them $5.9 million over five years.
Water tanks to go down the drain: Funding for water tanks and piping for grey water use will be reduced by $179.7 million over five years. Among other things this program provided up to $10,000 to surf life saving clubs to install rainwater tanks. When they put it like that it’s hard to argue against the logic of cutting back on this thing.
Cuts to cancer treatment funding: Almost $90 million will be saved by cutting a program that gives patients better access to radiation oncology services. The Government will argue that its investments in health, with programs targeted at cancer treatment and research, will compensate for this, but if you’ve benefited from this program or stand to you’d be a little nervous about that reassurance.
Changes to the PBS and grant programs from health and ageing: Pharmaceutical Benefits Scheme changes will mean the Government will save $1.9 billion over four years. Although it’s those big pharma companies that will pick up the tab, so nobody will kick up much of a fuss. The Government is saving almost $90 million on what it calls “grant reprioritisation” from the department of health. Basically it’s cutting future health grants but can’t say to from where, although it’s worth $88.9 million over the next four years.
Some bonus nasties….
Centrelink fraud prevention and compliance: $56.6m over four years. Enhanced spending on fraud detection to stop the abuse of the social welfare system by organised crime groups.
Family Court: $10.5m over four years. Not proceeding with filling four vacancies for judicial officers within the Family Court and Federal Magistrates Court. Government says: “reflects an expected reduction in the workload and improved administrative systems”.
National Native Title Tribunal: $7.8m over four years. Rationalising number of registries for the tribunal
Australian Learning and Teaching Council: $18.4m over three years. To be superseded by the Tertiary Education Quality and Standards Agency
Family Day Care Start Up Payment: $14.8 million over four years. Government to cease providing the payment, which is $1500 or $5000 in remote areas. Government says: “payments have not been successful in encouraging potential carers to establish FDC services as an ongoing business”.
Skills for the Carbon Challenge: $20m over four years. “Skills for Sustainability Incentive Pilot” program axed. Government says: No longer required, has been superseded by National Green Skills Agreement announced last year.
Business Skills for Visual Artists: $2m over four years. Surely one of the more controversial cuts in the budget, this axes the Cultural Development Program element of the Business Skills for Visual Artists program. Government says: “The Government provides ongoing support for artists through programs funded by the Australia Council.”
Caring for our Country: $81.3m over four years. Funding for the National Heritage Trust of Australia will be reduced by $70.4m, and for Landcare by $10.9m. Government says: “The Caring for our Country program will still provide funding of more than $1.6 billion over the next four years. A significant proportion of the savings come from departmental expenses.”
Environment Research Facilities Program: $3m over two years. Funding redirected. Government says: “has been replaced by the National Environmental Research Program”.
Point Nepean – Uni of Melbourne rental guarantee: $2.1m over six years. Axed, with the funds to be “redirected towards other Government priorities”.
Rainwater and Greywater initiative: $179.7m over five years. Reduced funding for the program that gives rebates of up to $500 for the cost of installing rainwater tanks or piping for greywater use. Government says: “in response to lower than expected demand”.
National Urban Water and Desalination Plan: $70.3m over two years. Program supports desalination, recycling and stormwater harvesting projects to secure water supply security in cities. Government says: funding reduced “in response to lower than expected demand”.
Family Tax Benefit Part A, requirements for 16 to 20 year olds: $31.2million over five years. Participation in education or training required. An anti-teen bludger measure.
Indigenous Communities Strategic Investment: $48.3m over five years Reduces funding to the program. Government says: “funds to be used towards the establishment of the National Congress of Australia’s First Peoples” and other programs.
Notification process for compensation recipients: $9.1m over four years. Smart move: compo payers will have to let Centrelink know about payments to clients from July next year. Centrelink can better assess the person’s entitlement to benefits.
Major office machines: $4.2m over five years. Government will switch to using a whole-of-government process for buying major equipment for offices.
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