With every Federal Budget there are winners and losers; those that gain from the Government’s proposed spending and saving measures and those who don’t (i.e. left worse off or forgotten about).
This year’s Federal Budget — the first by Treasurer Josh Frydenberg — comes at an interesting time with an upcoming Federal election (most likely to be called for May 11) to be announced at any moment. It also gives us a bit of insight into what topics will most likely take centre stage throughout the Government’s campaigning.
With a lot of technical jargon, understanding what this week’s announcements mean to you and your family can prove a little tricky, so to help, we’ve rounded up some of its key takeaways.
Here are the winners and losers of the 2019 Federal Budget:
QUIZ: How financially literate are you? Take the quiz to see how much you know about your personal finances. If you’re looking to sharpen your finance knowledge, be sure to check out Bauer’s Financially Fit Females hub.
Winners
Middle-income earners
There were significant tax cuts in the 2019 Federal Budget with $158 billion of additional tax relief for those earning between $18,200 and $126,000 a year (those earning $18,200 or less a year will continue to pay no income tax).
But the Budget’s biggest winner is the middle-income earner: if you earn between $48,000 and $90,000 a year (the average full-time worker in Australia earns between $80,000 and $90,000), you’ll receive a tax cut of $550, doubling the tax offset you were due to get in your next tax return to $1000-plus.
For a dual income household where two people are earning in that range, that means a $2000 windfall coming their way at tax time.
Remember, the tax cuts will only come into effect if the Government is re-elected — so hold off on any holiday planning (or Netflix subscription renewals) until then!
Pensioners
Four million pensioners will receive help with paying their energy bills with a one-off Energy Assistance Payment ($75 for singles and $125 for couples) costing $285 million.
This will also be paid to veterans, carers, single parents and people receiving the disability support pension before July this year.
Farmers
The 2019 Federal Budget has a lot of money dedicated to struggling farmers with the Government rounding up many of its previously announced farming-related policies and committing $3.9 billion to Emergency Response Fund.
Farmers affected by floods in North Queensland will receive $232 million worth of funding and there will be a $1.8 billion program to encourage banks to hand out low-cost loans to flood-affected farmers nationwide. Schools hit by flooding will receive an extra $4 million to rebuild, and there will be a $300 million infrastructure fund for farmers to do the same thing.
To help dairy farmers in their dealings with larger processors, the Government has set up a ‘dairy code of conduct’ that will cost $8.7 million over 11 years; however it doesn’t apply to their dealing with large chains like Coles and Woolworths.
There is also help for farmers dealing with drought ($6.3 billion for a concessional loan program and a $35 million boost for drought-related charities).
Small and medium businesses
The 2019 Federal Budget is extending and expanding its existing tax relief for small and medium businesses.
In his speech, Treasurer Josh Frydenberg called small businesses “the engine-room of our economy” and acknowledged the risk business owners take. The Government will bring forward small business tax cuts by five years, taking their tax rate from 27.5 per cent down to 25 per cent.
For small and medium businesses (businesses with turnovers less than $50 million), the instant write-off has been extended to cover assets up to $30,000, which, in simpler terms, means owners can deduct certain assets worth up $30,000 rather than claiming the depreciation over a number of years.
It’s the second write-off increase in just months, with the Government already having increased it from $20,000 to $25,000 in January. As Frydenberg put it in his speech, the expanded write-off will “[allow] a cafe to get a new fridge or grill, a plumber to buy new tools or a courier a new van”.
Apprenticeships also benefit from the Federal Budget, with current incentive payments for apprenticeships to be doubled for fields including bakers, bricklayers, carpenters and plumbers.
Mental health programs
In other good news to come from the 2019 Federal Budget, the Government is investing almost half a billion dollars into its mental health and suicide prevention strategy. With one in five Australians between 16 and 85 experiencing mental health concerns in any year, this comes as welcomed news.
Over the next few years Headspace will receive $373 million to assist in building new centres, reducing wait times at existing centres and the continuing of its specialist Early Psychosis Youth Services Program (which is currently at 14 Headspace centres). The funding will take the national Headspace centre total to 145 by 2021.
There will also be money set aside to address the high rate of suicide in Aboriginal and Torres Strait Islander communities ($5.2 million) and to invest in a young ambassador program that sees young people who have experienced mental health promoting health literacy within these communities.
Other areas to receive funding include workplace mental health, mental health of new and expectant parents, and those experiencing mental health issues after drought and natural disaster.
Domestic violence
Announced a few weeks back, there will be $328 million invested to try and help combat violence against women and children, with $64 million going towards 1800RESPECT, the national sexual assault, domestic and family violence counselling service, and $35 million in support and prevention strategies for Aboriginal and Torres Strait Islander communities.
The future of women in STEM industries
There will be a $3.4 million extension of funding for the Science in Australia Gender Equity (SAGE) initiative and to fund a national digital awareness raising initiative, fronted by Australia’s Women in STEM Ambassador, Professor Lisa Harvey-Smith.
While we’ll be the first to admit women in STEM strategies need far more support from the Government, the news is a good start.
Sports women
There will be a $150 million funding package for women’s sport. Score! (Literally.)
Regional Australia
Good news for those spending a lot of their time travelling between rural towns or rural areas and capital cities; the Government is spending money on improving roads and road safety. There will also be money put aside for improved rail links.
Other rural benefits will include funding for improved telecommunications and a program to incentivise both Australian and international students to study in rural regions.
Losers
Terrorists
Intelligence agency ASIO and the Federal Police are set to receive more than $500 million in funding over the next five years. The Government also announced it will enhance critical capabilities and operations at the Federal Police, including counter-terrorism activities.
First home owners
There was little in terms of housing affordability in this year’s Budget. While house prices aren’t quite as high as they have been in previous years, breaking into the property market still remains difficult and this year’s Budget had nothing to make it easier.
Visa Applicants
Unfortunately for those overseas looking to come and live in Australia, the Government is upping the base charge for all visa applications (except the 600 subclass) by 5.4 per cent.
