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Federal Budget 2011

published  First Published: 10/05/2011
Article written by: Nigel Brookson

 

Treasurer Wayne Swan delivers his fourth Federal Budget as treasurer; the first with Julia Gillard as PM.
Read what's in the Federal Budget 2011 for you.

In his opening paragraph; in fact second sentence, Treasurer Wayne Swan set the tone of the speech; and how he intends to sell it to the electorate:

To get more people into work, and to train them for more rewarding jobs. So that national prosperity reaches more lives, in more corners, of our patchwork economy.

Most Australian's long-term prosperity however rely's on the performance of super funds, directly or indirectly, and the funds have been offered tax incentives to play a key role in nation building.

 

After getting a beating in the Global Financial Crisis, the scheme could help the funds boost their returns for millions of Australian workers.

So just who is better off; and who is worse off in last nights 2011 Federal Budget?

Winners of the Federal Budget 2011

  • Super funds - more infrastructure projects to invest in with more secure outcomes
  • Unemployed - $233 million to get the long-term unemployed into the work force
  • Mentally ill - $1.5 billion in extra funding
  • Teachers - $425 million to reward top performing teachers
  • Apprentices - $101 million national mentoring program to help them finish training
  • POWs - Australian prisoners of war will get a $500 a fortnight benefits boost
  • Low paid workers - $300 a year of the Low Income Tax Offset to go into pay packets from July
  • Students with disabilities - extra $200 million
  • Regional Australia - $4.3 billion of investments in regional hospitals, health care and skilled migrants
  • Tradespeople - First $5000 of the cost of a work vehicle can now be immediately written-off by small business
  • Foreign aid - boosted by half a billion dollars to $4.84 billion

 

Losers in the Federal Budget 2011

  • The environment - no details of carbon tax, but more expected in the budget update in coming months
  • Sick - tougher criteria to get onto the disability support pension
  • Defence - $1.1 billion not spent on new equipment being handed back to the government and civilian staff cut by 1000
  • Families - family tax benefit will be cut off when children turn 21 instead of 24, saving $29.2 million over four years, income tests for Family Tax Benefits, Baby Bonus, Paid Parental Leave maintained
  • Company car owners - cuts to the fringe benefits tax concessions for salary-sacrificed cars will save $950 million
  • Public Service - increased efficiencies to save $1.1 billion
  • Asylum seekers - $292 million for an asylum-seeker swap program with Malaysia to stop the flood of boats
  • GPs - Medicare rebate for GPs reduced for mental health treatments
  • Dentists - delays on serious reform of dental health care due to a lack of funds

 

Read the full federal budget 2011 in the federal budget 2011 pdf delivered by treasurer Wayne Swan.

 

Most of the other winners and losers of the first Gillard government budget were already known.

Teachers, tradespeople, the mentally ill and POWs are among the winners, while public servants and company car owners are among the losers.

High performing teachers are to receive $425 million in bonuses from 2014 in a move which critics say could cause division among the profession but which will no doubt appeal to the top 10 per cent who stand to gain.

Tradespeople and other small businesses will be able to write off the first $5,000 of the cost of a work vehicle.

A tradeperson on a 30 per cent marginal tax rate, for example, will save $1,275 on buying a $33,960 ute.

The mentally ill will benefit from $1.5 billion in new spending, and students with disabilities gain from a new $200 million program.

Prisoners of war will at last get a $500 a fortnight benefits boost, the culmination of years of campaigning by ex POWs such as former Labor minister Tom Uren.

Low paid workers will see $300 a year of the Low Income Tax Offset start to go into their pay packets from July.

Regional Australia gets $4.3 billion of investments in regional hospitals, health care, universities and roads.

On the savings side of the ledger, the federal government will save almost a billion dollars by cutting the fringe benefits tax concessions for salary-sacrificed cars.

The change will end the mad annual dash by drivers to rack up enough kilometres to contain a lower FBT rate, as half a million cars go on to a single 20 per cent rate.

Increased efficiencies in the public service are scheduled to save $1.1 billion, and the defence department will save the same by axing civilian staff by 1,000 and handing back money not spent on new equipment.

The sick face more stringent scrutiny to get onto the disability support pension, and family tax benefit will be cut off when children turn 21 instead of 24, saving $29 million over four years.

One key measure affecting the entire nation; and an area that has dominated much discussion, the carbon tax, failed to get a mention in the 2011 federal budget.

The other winner from the federal budget will be the budget bottom line.

The government says all of the revenue will be handed back in one form or another, such as offsets to households for higher electricity prices, making it budget neutral.

The Government must rely on the Greens to see its budget measures pass, and Senator Brown says he is ready to use his position to see some changes are made.

He says he was disappointed, but not surprised, that the Government did not address changes to so-called middle-class welfare such as negative gearing and capital gains.

"We guarantee supply, but we guarantee that we can improve this budget," he said.

"There's so much in this budget that could have been done.

"We'll look at the detail of the reforms - some of them are harsh and punitive on young mothers and some disabled people - to see whether that's essential at a time when there is take-home pay in the tens of billions of dollars for people exploiting Australia's resources."

Not surprisingly Greens Leader Bob Brown has hit out at the Government for delivering a budget he says featherbeds the profits of large mining companies at the expense of the least fortunate in society.

"This is a budget lacking vision," Senator Brown said.

"It has some clever components to it, but it's a great missed opportunity. I'd give it a six out of 10."

Senator Brown criticised Treasurer Wayne Swan for cuts in the Department of Heritage and also for not mentioning the environment nor Indigenous Australians in his budget speech.

But he saved his harshest criticism for the Government's deal with companies over the minerals resource rent tax.

"The Greens would have made this budget sing,"

"We would have ensured that the mining boom was brought into the nation's services and wasn't just lining the pockets of the big mining corporations, who export tens of billions of that money each year out of this country.

"We believe this resources boom ... money from it should be put in a sovereign wealth fund for the future.

"The Treasurer is right, we are wealthy and have the budget potential like almost no other country on the planet.

"We are the wealthiest country in terms of resources per capita, but you wouldn't know that in this budget."

One thing is for sure though; as with all budgets there will be critisism from every sector of the community feeling hard done by, and more than enough 'Monday morning' critics with their 'armchair' expert comments to go round, not to mention the federal opposition letting us know how bad it was, and how they could have done it better.

 

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