Treasurer Scott Morrison has delivered the new federal budget to mixed reviews, although much of the feedback has been positive. With tax cuts at the centre, this budget was clearly aimed at the majority of working Australians, most of whom are middle income earners – not surprising in a pre-election budget.

Notably, Morrison proposed to reduce the deficit and bring the Australian economy back into surplus in 2019/20, a year earlier than previously forecast. There are winners and losers to every budget so let’s have a look at who benefits and who loses out this time around:

WINNERS

• Environmentalists: The budget pledged $500 million to protect the Great Barrier Reef, which has shrunk by 30% due to environmental degradation. The government hopes to preserve this World Heritage site by reducing agricultural run-off, improving water quality and implementing conservation programs.
• Older Australians: According to official figures, Australia’s population is aging and this budget has sought to provide needed support. An additional $1.6 billion has been added to improve palliative care and home treatment for the elderly, plus an Aged Care Quality and Safety Commission will deal with complaints. Retirees will also be able to earn more without having their pensions taxed. $83 million will also be provided for psychological services in residential aged care and $20 million in support of elderly Australians living in isolated conditions.
• Mental health: Mental healthcare will receive substantial investment, with an increase of $338 million going to suicide prevention and research as well as older Australians. Services including Lifeline and SANE Australia will receive additional funding.
• Super payers: Speaking of an aging population, anyone who pays into superannuation will benefit. Exit fees from super accounts are to be banned and a 3% annual cap will be placed on fees for accounts containing less than $6,000. On the other hand, any inactive accounts of less than $6000 will be transferred to the Australia Tax Office.
• Taxpayers: There were tax cuts aplenty, with both short and long-term plans presented. People earning between $37,000 and $90,000 will save $200-A$530 per year. From 2024 onwards, the plan is to raise the lower tax bracket threshold from $37,000 to $41,000, so that more people fall into the lower taxed group. Most Australians should then be on a tax rate of no more than 32.5%.
• Medical bills: Six new drugs will be added to the Pharmaceutical Benefits Scheme to treat conditions including several types of cancer, HIV and multiple sclerosis. Under 18s with spinal muscular atrophy will have their drug fees reduced from $300,000 to just $39.50. Pregnant women will also receive the whooping cough vaccine for free.

LOSERS

• Frequent flyers: Almost $300m will be used to enhance airport security, including full body x-ray scanners. On the other hand, security-minded people will approve of improved security scans at regional airports and for incoming cargo. The intelligence services will also receive an undisclosed amount in additional funding.
• Foreigners: Increases to foreign aid have been frozen and will not increase correspondingly to the size of the economy. Overseas doctors will also be reduced by 200, thanks to the easing of Australia’s doctor shortfall. The waiting period for new migrants to receive government welfare has also been extended.
• Low income earners: The budget’s tax cuts were squarely aimed at middle earners and some have claimed that this will widen inequality.

Speak to one of Smartline Rockingham’s mortgage specialists today for more insights and tips on budgeting.

Sources:
http://www.news.com.au/national/budget-2018-fallout-australians-react-to-treasurers-announcement/news-story/a08d832bdb894c1cb7f854bf82e1df0c
http://www.abc.net.au/news/2018-05-08/federal-budget-2018-winners-losers/9738982
http://www.switzer.com.au/the-experts/peter-switzer-expert/the-budgets-winners-and-losers-i-name-names-today20180805/?utm_medium=newsletter&utm_source=switzer-daily