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Australia What's in the budget? Here are the key measures we already know about

22:40  10 may  2021
22:40  10 may  2021 Source:   msn.com

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Treasurer Josh Frydenberg is unveiling his third budget tonight but, as usual, we already have a pretty good idea of what's in it.

Pre-budget leaks are a well-established tradition, and this year has been no exception.

Here are the major policies that have already been flagged ahead of the Treasurer's budget speech tonight.

International borders

The budget will assume that our international borders will remain closed until 2022 at least.

Six months ago, in the October budget update, the government was assuming borders would reopen this year.

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But with Australia's vaccination program (which is a federal responsibility) suffering significant problems in recent months, the government says it may not open our borders until next year at the earliest.

Hip pocket

The so-called "low and middle-income tax offset" will remain in place for another year.

The tax rebate, which workers receive after completing their tax returns, is worth different amounts to different income groups.

It was supposed to finish on June 30, but it will be extended for another 12 months.

A recent analysis by the Bankwest Curtin Economics Centre found if the rebate wasn't extended beyond June 30 this year, 10 million workers would face an effective tax hike.

The majority of workers facing that tax hike would be women.

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Child care

Expanded childcare subsidies worth $1.7 billion.

The government will add $1.7 billion, spread over three years, to the childcare spend (the annual childcare budget is $10.3 billion).

However, the spending won't come into effect until July 2022.

When it does kick in, it'll benefit families differently depending on their incomes and the age and number of their children.

As things stand, childcare subsidies are capped at $10,560 (per child) if your family earns over $189,390. The new policy will remove that cap.

There are 200,000 families with incomes above that threshold that could benefit from the change.

The policy will also increase subsidies for families with two or more children under the age of five.

The subsidy boost (an extra 30 per cent) will apply to the second or subsequent child in care.

For example, if a family's first child in care is eligible for a 65 per cent subsidy and their second child enters care at the same time, the second child will be eligible for a 95 per cent subsidy.

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However, once the oldest child turns six (or leaves child care), the subsidy for the second child will fall back from 95 per cent to the lower existing rate.

The policy is aiming to stop the cost of childcare doubling, or potentially tripling, for families with multiple children in care.

Housing policy

With property prices soaring and thousands of Australians migrating across the country in search of more affordable housing, housing has become a major concern.

The budget will include a number of policies in this area.

'Family Home Guarantee' for single parents:

Single parents will be given federal government assistance to purchase a home.

Under the scheme, a single parent will be able to purchase a dwelling with a 2 per cent deposit, with the government guaranteeing another 18 per cent of the value of the loan.

The scheme will support up to 10,000 single parents and will be spread over four years, averaging 2,500 single parents a year.

The scheme will be subject to property price caps.

'New Home Guarantee':

The government will be adding another 10,000 places for singles and couples to the New Home Guarantee.

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The scheme allows first home buyers to build a new home or buy a freshly built home with a 5 per cent deposit, with the government guaranteeing up to 15 per cent of the loan.

'First Home Super Saver Scheme' (FHSSS):

At the moment under the FHSSS, anyone wishing to save a deposit for their first home can make voluntary contributions to their superannuation fund, capped at $15,000 a year, to take advantage of the special tax treatment of super.

That maximum they can save under the scheme is $30,000.

However, that cap will be raised to $50,000 in the budget.

JobTrainer

The $1 billion JobTrainer program will be extended by a year.

The package, designed for 17- to 24-year-olds, aims to create about 340,700 places nationwide to train school leavers or re-skill young people who are currently looking for a job.

The program, which was announced in July last year, was scheduled to expire in September but it will run for another 12 months.

Aged care

The budget will include the federal government's "full response" to the aged care royal commission.

It will reportedly announce a funding program for the next four years' worth up to $18 billion.

The majority of the money will be used to build a better trained and paid aged care workforce.

Superannuation

The existing "downsizer scheme" that helps anyone aged 65 or older boost their super savings with proceeds from the sale of their family home will be extended to people who turn 60.

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The scheme, introduced in the 2017-18 budget, allows people aged 65 or over to make a one-off contribution to their super account worth up to $300,000 after selling their home, outside of the normal rules governing the tax treatment of super.

From July 1 next year, people aged 60 or over will be able to make downsizer contributions to their super.

In a separate measure, self-funded retirees will be able to increase their super savings more freely because the government will be abolishing the work test.

At the moment, the work test applies to people aged between 67 and 74.

But it will be abolished for that age group on July 1, 2022, making it easier for them to top up their super.

Brewers and distillers

Small brewers and distillers will benefit from larger tax breaks, in a bid to encourage more investment in the sector.

At the moment, they can claim a 60 per cent refund on the excise they pay, up to $100,000 annually.

Under the new rules they'll be able to claim a full refund on the excise they pay, up to $350,000 annually.

It will reportedly triple the amount of alcohol producers can sell before excise tax applies.

Infrastructure

An extra $10 billion will be spent on major infrastructure projects over the next decade, across all states and territories.

There will be $2 billion for a new freight hub in Melbourne and $2 billion to upgrade the Great Western Highway between Katoomba and Lithgow in New South Wales.

There will also be funding for road projects in South Australia (Truro Bypass), Tasmania (Bass Highway), Northern Territory (National Highway Network), and the ACT (William Hovell Drive) as well as rail and freight upgrades in Queensland and Western Australia.


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