Menu
News

Budget 2016: The important changes you need to know

PLANNING FOR THE FUTURE: Treasurer Scott Morrison and Prime Minister Malcolm Turnbull discuss the 2016 budget. Source: News Corp Australia
PLANNING FOR THE FUTURE: Treasurer Scott Morrison and Prime Minister Malcolm Turnbull discuss the 2016 budget. Source: News Corp Australia

THE 2016 federal budget has outlined major changes to taxes on superannuation for higher income earners and the tobacco tax rising for 2017, as well as a wide range of spending cuts and a couple of new spending plans.   

The biggest spending cuts will affect university subsidising programs, job loses in the public servant sector and the Work for the Dole Scheme.   

The three biggest Government expenditures are in the States and Territories assistance revenue, the aged pension and the Medicare scheme, while new spending plans include Government contributions to schools and hospitals, as well as military funding for operations in the Middle East. 

Find out all the major highlights from this year's budget below:   

Budget overview: 

The federal budget will carry over into the next four years with a deficit, with no major change to the bottom line on Treasurer Scott Morrison and Prime Minister Malcolm Turnbull's first budget.  

The coming year's deficit is expected to be $37 billion.  

Revenue:   

Chief economist for Industry Super Stephen Anthony told ABC News the budget's 'strong growth' is predicted on China's own growth forecasts, which are notoriously opaque.   

Major changes to taxes:   

The Government proposes to raise the tax on tobacco in 2017 in the hope that will improve tax revenue by $4.7 billion over the next few years.   

This budget has upped the tax on superannuation for higher income earners, so people earning over $250,000 a year will be taxed at 30 per cent for any extra super contribution over $25,000.  

The 'Ten Year Enterprise Tax Plan' will deliver small income tax cuts for middle-income workers and tax cuts to businesses over the next decade.  

This is a tax cut for medium-sized businesses with turnover of less than $10 million.   

Government spending:   

More than $450 billion will be spent on general government services in the next year, which is about a quarter of the GDP.   

Spending cuts:   

The biggest change is a diversion of funds from the Social Services portfolio to save money for the future of the National Disability Insurance Scheme to eventually become expenditure, beyond the forward estimates.   

Cuts to universities announced by Former Prime Minister Tony Abbott and Former Treasurer Joe Hockey that did not pass the Senate are included in this budget.   

ABC News reported this will see a $2 billion 'saving' starting with a $100 million cut in the next year, increasing to half a billion for each of the following two years, and nearly $800 million a year by 2020.   

The Government will also increase the public service efficiency dividend, consequently resulting in further job losses for public servants in the coming years.   

Another cut has seen the child care subsidies deferred for another year, pending approval of cuts to family benefits, after they were promised in the last budget.  

Work for Dole was cut, with the whole model being reworked into a new youth employment program.   

Biggest spending:   

Revenue assistance paid to the state and territories, mainly generated via the GST, remains one of the largest money pools.  

The aged pension is the second largest expenditure, coming in with more than double the spending of the Medicare program.   

New spending plans:   

The biggest new expenditure over the next four years is contributions to schools and hospitals, which was negotiated with the states and territory leaders back in April.

The funding will not begin straight away but is expected to come through mid 2017, with the biggest payout planned for 2019.   

The ABC reports this budget includes a combined half a billion dollars from in Government spending for next year's military operations in the Middle East (Operations Okra and Accordion) but has not budgeted for that level of funding over the long term. 

Topics:  australia budget general-seniors-news seniors


Guardian angel: Man wins Powerball off late dad’s numbers

A Greenfield Park man scored the entire $8 million division one prize in last night’s Powerball draw.

Man "still in shock" following life-changing $8 million win.

Classic films: When the silver screen was truly silver

A screen capture from Oliver Twist

Take a glimpse into the past of old films.

Rock on! Couple goes retro in 50s engagement shoot

Couple's retro 1950s style shoot

A couple goes retro in a 1950s engagement shoot.