ON THE MONEY: A LOOK AT THE FEDERAL BUDGET
Unless you’ve been living under a rock (nothing wrong with that), you will know that Australia’s 2015 Federal budget has just been released by the Abbott Government. In an era of global economic uncertainty and continuing currency wars in geopolitics – which Australia is also fighting – this budget has come across as a bit of a dud on the economic front, but on a politics and fairness standpoint, it does well.
There’s much in the budget for welfare seekers. If you’re a low to middle income household, and if you have children, the extra $3.5 billion set aside over a five year period for childcare will definitely put wider smiles on your faces. Similarly, if you’re a young unemployed person, you don’t have to wait for six months to get dole. Up to the age of twenty-five, you will only have to wait for four weeks to get your income support, which is a big help in these uncertain times where the unemployment rate is 6.5%.
Austerity measures have come mainly in the immigration and foreign aid areas, where Indonesia and Africa lost 40% and 70% respectively of the aid they got from Australia last year. There is significant tightening of the purse-strings when it came to infrastructure too, with current Government obligations approved to the end but no new large projects funded. It is difficult to see how, without investing in infrastructure, long-term jobs can be created.
The biggest positive in the budget is the number of incentives given to small businesses, which – in theory at least – drive the economic engine of any country. In addition to a one-time tax break for purchases up to $20,000, there is a tax cut of 1.5% for small companies, and a tax discount of 5% for small unincorporated businesses.
Clearly, the message given out to small businesses is to go out and make investments and grow their businesses. But with no infrastructure investments and very little economic thrust to create new jobs and to create more wealth, the amount of growth businesses can achieve may be limited.
All in all, a safe, conservative budget that touches upon all the required frameworks but improves the conditions of only a few.