Both sides are promising tax relief for ordinary Aussies.
Both sides are promising tax relief for ordinary Aussies.

What we know about the budget

SCOTT Morrison has hinted the government could ramp up tax relief for Australians in next week's federal budget.

That comes as healthcare is shaping up as a key economic battleground for the looming federal election, with both major parties arguing they are the best placed to fund essential services.

Speculation is mounting that Treasurer Josh Frydenberg's first budget, to be handed down next Tuesday, will bring forward income tax cuts that have already been legislated as well as improve tax offsets for low-income earners.

Asked about the prospect of extra tax relief in the budget on Monday, the prime minister said his record for lowering taxes is clear.

"Wherever I get the opportunity to give Australians further tax relief, I never miss the opportunity," he told reporters in Melbourne.

The government passed a personal tax cut package through parliament last June, with the first stage kicking in for the current financial year and further reductions due in 2022 and 2024.

The cuts will lead to a single person on $30,000 keeping an extra $200 a year, while someone on an average wage of around $85,000 would get $540 and a $200,000-a-year salary earner would get $7225.

Labor has opposed the higher-income tax reductions and says it will give cuts of $350 to people earning $25,000 and up to $928 for people on $90,000 a year. "All I know is that we are offering bigger, better, fairer tax cuts," Opposition Leader Bill Shorten told reporters in Melbourne.

As Australians wait to see whether the budget will actually mean they get to keep more of their pay, both sides of politics have been busy laying out their plans to fund health services.

The government will spend an extra $496 million on cancer treatment over six years from 2018/19, including $80 million on a new national facility at Melbourne's Peter MacCallum Cancer Centre.

Labor has vowed to stop the Medicare rebate freeze it introduced when in government in 2013 a year earlier than planned if it wins the election.

The freeze has meant rebates for some services have been kept at the same rate for years, despite costs generally going up across the economy through inflation.

The measure has been ending in stages since mid-2017, and is due to finish completely in mid-2020.

Ending the freeze early will cost $213 million and mean rebates for about 100 GP items - including family counselling and mental health care - will resume going up in line with inflation.

Health Minister Greg Hunt has stressed it was Labor who brought the freeze in and the coalition that is getting rid of it.

The victory of Gladys Berejiklian's coalition government at the NSW election has also left the Morrison government more confident it can woo voters by playing up its economic management credentials.

 

Josh Frydenberg will hand down his first budget next week. Picture: Alan Barber
Josh Frydenberg will hand down his first budget next week. Picture: Alan Barber

 

Bill Shorten is offering ‘bigger, better, fairer tax cuts’. Picture: Joel Carrett/AAP
Bill Shorten is offering ‘bigger, better, fairer tax cuts’. Picture: Joel Carrett/AAP

 

WHAT WE KNOW SO FAR

- Paul Osborne, AAP

BIG PICTURE

• Overall theme: "A stronger economy and a secure future"

• Federal election is due in mid-May

• Better than expected surplus for 2019/20 (MYEFO: $4.1 billion in 2019/20)

• 3 per cent growth for 2019/20 (MYEFO forecast)

• 5 per cent unemployment rate for 2019/20 (MYEFO forecast)

• Migration cap to be reduced to 160,000 from 190,000

• 1.25 million new jobs to be created over the next five years

• Expectation of a "stimulus" worth about $6 billion, adding about 0.4 percentage points to GDP

TAX

• Likely bring-forward of the July 2022 income tax cuts, on top of those already starting July 1 this year, as part of an already-legislated $144 billion plan

• Possible improvements to tax offsets for low-income earners

• Rules around $69 billion GST revenue distribution to the states have changed, with WA the main beneficiary

• Instant asset write-off extended to June 2020 and upped from $20,000 to $25,000. Allows small business with an annual turnover of less than $10 million to deduct the cost of assets such as cars and equipment

• Tax office and other agencies to crack down on welfare cheats and tax dodging

ROADS, RAIL

• $75 billion infrastructure plan over 10 years continues

• Business case for Melbourne airport rail link

• City deals for Adelaide, Hobart, Townsville, Launceston, Western Sydney, Darwin, Geelong, South East Queensland and Perth

HEALTH

• $220 million from Medical Research Future Fund for research into heart disease

• $496 million for Victorian cancer research, services and facilities

• $200 million to reduce out of pocket costs for scans such as ultrasounds and X-rays

BANKS

• $600 million boost for financial regulators ASIC and APRA to deal with banking royal commission fallout

SECURITY

• $294 million to upgrade security at airports in a bid to prevent terrorist attacks

• Australian Space Agency to be funded

ENERGY

• $2 billion for Emissions Reduction Fund, now called the Climate Solutions Fund

• $1.4 billion for Snowy Hydro 2.0

• $56 million for Battery of the Nation and Marinus Link projects in Tasmania

• Speculation of an announcement of the first power projects to be underwritten by the government, following 66 expressions of interest

EDUCATION

• $60 million for James Cook University's Cairns Tropical Enterprise Centre

• $60 million indigenous education hub in Melbourne

WELFARE

• $78 million to provide more housing for women and children fleeing family violence - $129 million to extend cashless welfare card to all of Northern Territory, and to Cape York communities in Queensland

CULTURE

• $12 million for Cooktown 2020 Festival (250th anniversary of Cook's landing) and replica HMB Endeavour to circumnavigate the country