This Is What We Know Will Be In Today's 2014 Federal Budget

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With all the talk of tough love, the end of the age of entitlement and sharing the burden of a budget deficit which needs to be fixed, you don’t need an excuse to be depressed.

Joe Hockey’s budget is the Treasurer’s first and the first fiscal test of the Coalition government elected in September.

The message is consistent: Labor has left a budget crisis and the damage must be repaired through drastic action now and over many years to come.

This budget has been one of the leakiest for some years. A part of what’s emerged so far appears to contradict promises made by Tony Abbott not to introduce new taxes.

However, the Coalition promised to deliver a budget surplus of 1% of GDP within ten years and Tony Abbott is determined to start that process.

The budget, according to comments by Treasurer Joe Hockey, has a few themes. These include:

  • More means testing
  • Greater use of co-payments and cost contribution
  • Adoption of ‘user pays’ models
  • Assistance which helps the jobless move to employment and restoration of “work for dole”, and reduction of assistance to industry

Here’s what to expect:

A deficit levy for those on incomes of $150,000 appears to be still in the budget despite widespread opposition from major industry groups, economists and even the government’s own ranks of backbench MPs. The tip is 1% extra tax. There have been many numbers on how much this would raise in new revenue.

Fuel. It will cost more to fill up the tank with petrol. The fuel excise has been set at 38.1 cents a litre since the Coalition under John Howard stopped indexation in 2001. Raising it twice a year in line with inflation would reportedly raise $340 million in the first year and $1.5 billion a year by 2018. Mr Hockey says any money raised would be spent on roads.

Medical. Going to the doctor will cost. The days of bulk billing are gone. Everyone will be expected to make a payment for visiting the doctor. The number being tipped is $7.50 per visit.

Welfare should be a safety net for those in need, not a cargo net for the middle class. This is where some real damage, or savings, can be had. The days, the government says, of easy welfare are gone. Expected moves include making single people under 25 move to where the jobs are or risk losing unemployment benefits. And stricter rules for disability support pensions and more regular testing to ensure people meet the criteria. The middle class Family Tax Benefit is highly likely to depart for most. This is a tax break for a lot of taxpayers with a child. The government will just change the threshold, making to accessible to fewer families.

Pension. If you were born after 1965 you won’t get the aged pension until you turn 70. Mr Hockey has confirmed the eligibility for the aged pension will rise to 70 from 2035.

Infrastructure. This is the catch word and a big deal will be made of it tomorrow night. Tony Abbott wants to be known as the infrastructure prime minister and to prove it, he’s chucking more than $40 billion at it over four to five years. This will mean lots of new roads. Details will be in the budget as will his infrastructure recycling fund agreed with the states whereby the commonwealth kicks in 15% of the cost of a project where the state is reusing some of the money raised from sales of assets like ports.

Smaller government. Fewer government agencies will mean up to $500 million in savings. All part of the Tony Abbott’s making government more efficient drive with less red tape. The Commission of Audit recommended a raft of amalgamations, including the main indigenous bodies becoming one, plus abolishing others. Could be as many as 76 government and semi government bodies heading to the scrap yard. Already announced is that Customs will become part of the Immigration Department.

Privatisation. The Royal Australian Mint and the Defence Housing Australia are on the list for sale.

Pay Freeze. No doubt part of the sharing the burden story, Tony Abbott is trying to put a freeze on the pay of politicians. Mr Hockey has confirmed the independent remuneration tribunal will be asked to consider a pay freeze for politicians and top public servants. MPs are due a 2.4% rise on July 1, about $3,900 for an MP backbencher. Prime Minister Abbott would lose a rise of more than $12,000 on his $500,000 salary.

The ABC. The Australia Network, a government-funded service beaming into Asia, will be cut. Critics say this service does wonders for Australian positioning of business in the region.

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