Australia Treasurer Promises Fair Budget That Reins in Debt

The Western Sydney airport is getting $5.3b over ten years.

Morrison has sought to change the terms of the economic debate, from dire warnings on debt and deficit to a more politically astute one of prosperity and jobs. It’s also contributing nearly A$43 billion of projected savings over the ten years to 2026-27.

And a separate $8.4b for the inland rail line from Melbourne to central Queensland. This would ensure that small business owners are supported in taking on larger projects and able to manage cash flow more effectively.

Assets that cost $20,000 or more (which can’t be immediately deducted) will continue to be deducted over time.

Having promised better housing affordability, a $1 billion UK-style fund will be set up to provide new homes in cities, with a further $1.3 billion for the states and territories to improve supply of low-priced housing.

Among its initiatives directed to avoiding a future “Mediscare” campaign, the budget promises to “guarantee” Medicare, progressively unfreeze the Medicare rebate, and maintain the bulk billing incentives for pathology and diagnostic imaging services. “We will inject up to $5.3 billion in equity over the next ten years into this company”.

The government gave up on making cuts in health and education spending that the Senate has been rejecting as unfair to the poor since the ruling coalition’s first budget in 2014.

The Treasurer also set aside $1 billion over the next four years to cover the cost of lifting the long-running freeze of the Medicare Benefits Schedule, which means that the amount Medicare will cover of medical costs will gradually rise.

The budget will invest $18.6 billion in extra funding to schools over the next 10 years.

Among revenue boosting measures was a six-basis point levy on the liabilities of banks with liabilities of more than A$100 billion from July 1, a move that will help the government raise A$6.2 billion through 2020/21 to aid budget fix.

In an extensive pre-Budget interview with The Daily Telegraph, Treasurer Scott Morrison said he understood Australians were counting on “fairness” in the Budget. ALGA has asked for a disaster mitigation program to be established funded at $200 million per year and an investment of $100 million over four years to support councils to manage their own climate risks. “This will rein in a high growth deduction item and improve taxpayer confidence in the negative gearing system”, Morrison said.

The conservative government of Prime Minister Malcolm Turnbull has blamed a lack of supply for sky-rocketing house prices and on Tuesday announced setting up a A$1 billion National Housing Infrastructure Facility to help develop new homes.

It will be fascinating to discover is there is any mention of the National Party-led push to decentralise government jobs, typified by the Australian Pesticides and Veterinary Medicine Authority’s move from Canberra to Armidale, in tomorrow’s Budget.

Mr Morrison will unveil the budget, his second since becoming treasurer, in a speech to parliament at 19:30 (09:30 GMT).

Not much can go wrong, particularly if the government is to have any hope of carrying out what is clearly its unstated political strategy of using any upside to announce tax cuts in next year’s budget, ahead of the federal election.

The key announcements within the budget should surprise few when Treasurer Scott Morrison stands on Tuesday night.