It looks like the Abbott Government has completely changed its tune in this year’s Federal Budget. Unlike the 2014-15 Budget, there seem to be smaller changes and fewer shocks. Sticking to the Government’s iconic three-word slogan style, this Budget is all about “jobs, growth and opportunity”. Abbott and Hockey appear to have picked up on the complaints made by Shorten and the Australian people, particularly those in the lower income bracket, and consequently have made “fairness” the clear theme of this year’s Budget. Whilst Hockey’s soundbite used to be “the age of entitlement is over”, this year it has given way to the 2015 mantra of “measured, responsible and fair”.
Treasurer Joe Hockey said in a press conference this afternoon that the Budget “is about getting on with it… this is about giving people the chance to get ahead, this is about growing the economy.” He urged the Australian public to look at his financial vision with a “glass half-full” attitude.
The following policies contained within the 2015-16 Federal Budget will need to be passed through the Senate before becoming a reality.
2015 Budget did not directly mention university fee deregulation, however its reintroduction was foreshadowed in the budget with Hockey saying in the press conference today that the Government is “absolutely determined to put it back to the Senate.” It is predicted that the Government will spend $171 million more on higher education in the next financial year, but estimates for 2016-17 show that spending will then be cut by $213 million.
An Australian Graduate Abroad
The Abbott Government will try to improve the “fairness” of the Higher Education Loan Programme (HELP) by recovering debts from Australians working and living outside of Australia. At present, domestic graduates, who have migrated overseas, have no legal obligation to repay their HELP debts. For those in the know, this has proven to be a very useful loophole to avoid paying back the Government the debt you accumulated at TAFE or university.
But no more! Starting from 1st January 2016, the Government will be imposing the same repayment obligations on Australians living overseas as apply to those who reside in Australia. This scheme will affect graduates living overseas who earn above AU$53,345 (the 2014-15 minimum HELP repayment threshold). “Debtors” who go overseas for more than six months will need to register with the Australian Tax Office, while those already overseas will have until 1 July 2017 to register. Although this is estimated to recover $26 million over four years from 2015-16, the programme is an “integrity measure” rather than a savings method: “there is no good reason why Australians living overseas earning high incomes cannot pay back what they owe to Australia.
Education Minister Christopher Pyne has extended the life of the National Collaborative Research Infrastructure Strategy (NCRIS) for one more year by giving the research scheme $150 million. This money will keep Australia’s major research facilities operating, including the Australian Phenomics Facility here at the ANU. The NCRIS was left without ongoing funding from the previous government, however Pyne’s commitment seems to have come at a cost to the Sustainable Research Excellence (SRE) scheme, which is set to lose $150 million.
The SRE replenishes the research money that universities receive in competitive grants from the Australian Research Council and the National Health and Medical Research Council. When university researchers win competitive grants, the grant usually does not cover the full cost of the research program and so SRE fills in the financial gap.
Social Welfare & Employment
Back to Work
A $330 million ‘Youth Employment Strategy’ will make it easier for young people to enter the workforce. $212 million of this Strategy will go towards a ‘Youth Transition to Work’ programme, which will assist young people who have disengaged from work and study and “are at risk of long-term welfare dependence”.
Another $106 million will pay for intensive support for vulnerable job seekers, including young people with mental health concerns and young migrants.
Another $14 million will be set aside for an ‘Early School Leaver’ policy, which will help leavers get into work or study. However, the Government makes clear that to benefit from this policy, “job seekers need to make every effort to look for work”. Furthermore, from 1st January 2016, early school leavers aged between 15 and 21 years old will have to work 25 hours a week to qualify for income support until they earn a year 12 certificate III qualification or turn 22.
The Government will provide $18 million over four years for around 6,000 job seekers annually to undertake internships lasting up to four weeks while they continue to receive income support.
Under 25-year-olds will also have to wait four weeks before qualifying for payments, rather than the six month period provided for under-30s proposed in the last Budget.
Tax Evasion and Financial Crime
Something that might cause Graham Tuckwell to shift in his deck chair is the crack down on tax evaders and renewed rigour to fight financial crime. This Budget is all about “doing the right thing”, and so the Australian Taxation Office will be given an extra $11.3 million to continue a series of compliance actions to make sure “honest businesses have a level playing field”. The programme will allow the ATO to identify fraudulent GST refunds, under reporting of GST liabilities, failure to lodge GST returns and outstanding GST debts. Under new law, companies caught cheating will have to pay double what they owe plus interest.
From July 2016, backpackers and those on working holidays in Australia will lose access to the tax-free threshold of almost $20, 000 as they will be now classified as “non-residents”. In his Budget speech, Hockey said, “anyone on a working holiday in Australia will have to pay tax from their first dollar earned…” This change is predicted to raise $540 million over the next four years.