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Published: Wed, May 10, 2017
Economy | By Melissa Porter

Australia treasurer promises fair budget that reins in debt

Australia treasurer promises fair budget that reins in debt

Education could be another victor, after the announcement of a $13.1 billion dollar funding increase.

Australian Treasurer Scott Morrison delivered his federal budget Tuesday evening in Canberra, seeking to boost the government's flagging poll ratings through a A$75 billion ($55 billion) infrastructure plan that aims to support growth and jobs.

Public servants and local councils are hoping Treasurer Scott Morrison's "good news" Budget really is.

"We choose to focus on growing our economy, in particular by investing in infrastructure, to secure more and better paying jobs".

Tuesday's budget will contain new funding which takes the federal government's share of money for the University of Newcastle project to $45m.

But it was also Morrison who watched the coalition deliver a series of budgets that fanned Senate antipathy and turned a thumping parliamentary majority into a one-seat tightrope walk.

The government will also lift the freeze on the Medicare rebate from July, which is set to cost the government an extra $2.2 billion but will be covered by an increase in the levy. Nor would it be applied to superannuation funds or insurance companies. "It's time that the politics of that ends and we give disabled Australians and their families the guarantee they deserve".

Pensioners hit by an assets test change introduced earlier this year will get their concession cards back.

"Under this plan, most first home savers will be able to accelerate their savings".

Downsizers over the age of 65 will be able to make a non-concessional contribution of up to $300,000 into their super fund from selling the family home.

But economists say such measures will help only at the margin, given the government's reluctance to tweak a tax treatment on property massively favored by the wealthy known as 'negative gearing'.

A similar survey by CoreLogic, a property data firm, found that 87 per cent of non-home owners were concerned about affordability; 30 per cent were looking to inheritance or the "bank of mum and dad" to help them buy.

There will be tougher rules for foreign investors in the housing market.

That's a pretty big tax increase across the board, and most of it is going into health funding.

It sees the unemployment rate at 5.75 percent in 2017/18, easing from a 13-month high of 5.9 percent now while it pegged the consumer price index (CPI) at 2 percent, climbing to 2.5 percent by 2020/21.

This is a level normally associated with stronger employment growth.

So will anyone benefit from a budget attempting to fix last year's reported $37.1 billion deficit?

The backflip resulted in a bigger A$29.4 billion deficit for 2017/18 than the A$28.7 billion forecast at the mid-year review in December.

The government will inject up to A$5.3 billion into the construction of the second Sydney airport.

Infrastructure projects include: A new airport in Western Sydney; acquiring greater or outright ownership of the Snowy Mountains hydroelectric scheme and then expanding it; upgrading highways across the nation; and funding for a Melbourne-to-Brisbane inland railway.

"It's $8 billion. A tax increase which affects nearly every working Australian", he said.

Now the nation's top five banks - the Commonwealth, NAB, Wespac, ANZ and Macquarie - will be hit with a 0.06 per cent bank levy on their deposits, starting from July 1 this year. "They have done it because they think banks are an easy target", she said.

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