Surprise tax increases in 2017 Australian budget

Surprise tax increases in 2017 Australian budget

Surprise tax increases in 2017 Australian budget

Instead it seriously antagonised a Treasurer looking for a swift, neat, way to sweep billions off his budget deficit.

The 2017 Budget also seeks to entirely recover from Labor's Mediscare campaign that almost cost the Coalition the election while tackling the Opposition's main arguments on schools' funding, training and a calls for a Royal Commission into the banks.

Numerous commentators described it as a "Labor Budget" because it had shown a surprising willingness to increase taxes and to boost spending on areas such as schools and support for the disabled.

Mr Morrison warned the banks not to put up fees to cope with this new tax during an address at the National Press Club in Canberra on Wednesday.

The Treasurer believes better days are ahead, thanks to an uptick in the global economy.

Australia's treasurer on Tuesday promised a budget for the next fiscal year that would be fair and rein in mounting debt.

"And I believe Australians want us to fill that gap". This will cover nearly half of the "zombie" savings measures the Turnbull Government has been unable to get through the senate.

"It doesn't include the regulatory required capital for banks to ensure they're unquestionably strong".

Likewise, Macquarie has said that the impact on the bank is "unclear" at this stage, adding that it is "uncertain whether the proposed levy will apply to Macquarie Bank Limited's statutory liabilities, funded balance sheet or whether liabilities relating to foreign business or subsidiaries will also be included".

The banking sector will also face higher fines should executives breach misconduct laws, ranging from $50 million for small banks to $200 million for larger banks.

The government takes on the banks at their peril.

But because the major banks control such a large portion of the Australian loan market, there are concerns that that cost may wind up being passed back down to customers in the form of further rate hikes.

The Prime Minister said that would be unwise.

Defence spending will hit two per cent of GDP by 2020/21.

And the ultimate sign of getting the message is the abandoning of the so-called zombie measures - the cuts from the 2014 budget the senate refused to pass.

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Mervyn Tang, director of Asia-Pacific sovereigns at Fitch Ratings, said the new revenue measures in the budget implied a faster reduction in the government deficit. It's a sign of how much damage the Labor campaign on health and Medicare did to the Coalition.

About $2.9 billion was allocated to build Western Sydney, with an additional $1.5 billion in funding and a $2 billion concessional loan committed to WestConnex.

The Government has also heard the anger over housing prices.

That amounts to $2.2 billion over the next four years.

"We've had a fights about funding for several years".

Wage growth is projected to accelerate to 3.75 per cent by the end of the four- year budget estimates, nearly double the rate now.

Companies hiring workers from overseas on the new temporary skills shortage visa and certain permanent skilled visas will be slugged with a levy that will go into the government's new 'Skilling Australians Fund'.

The hard work is done for now; it's time for them to begin the hard sell.

States would only be able to draw on the fund once they delivered on their commitments to train new apprentices.

"For the system to be fairer there needs to be greater competition and accountability - now", Mr Morrison said. "But by adopting a comprehensive approach, by working together, by understanding housing needs, we can make a difference".

The contributions will receive the tax advantages of superannuation, with contributions and earnings taxed at 15% rather than marginal rates.

It is expected that the new levy will raise up to $6.2 billion.

The government will set up a National Housing Infrastructure Facility worth $1 billion and based on a similar United Kingdom model to help local governments assist with developing new homes and apartment blocks. The flagship project is an A$8.4 billion Melbourne to Brisbane inland railway to begin construction next financial year.

The government expects the airport, scheduled to open in 2020, to create 20,000 jobs by 2030 and 60,000 in the longer term.

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