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The Budget in 500 Words

The Abbott government’s first budget was delivered on Tuesday, May 13, and is full of broken promises, with deep cuts to welfare, health care and education that will inflict much of the pain on students, low- and middle-income families, the unemployed, the sick, and pensioners.

The signaled cuts are a clear breach of the Prime Minister’s 2013-election eve promise of “no cuts to education, not cuts to health,” with a massive $80 billion to be cut from education and health.

Higher education tuition fees will be deregulated and universities will be allowed to set their own fees for courses.

The student contribution towards tuition fees will be uncapped, and the interest rate charged on FEE-HELP loans will be changed to a higher rate.

“The higher education sector is being held back and cannot compete with the best in the world,” Treasurer Joe Hockey said.

“With greater autonomy, universities will be free to compete and improve the quality of the courses they offer.”

The cuts to health also signal the beginning of the end for Medicare and universal health care.

A $7 co-payment for GP visits will be introduced, with $2 will be kept by the GP clinic and $5 will contribute to the new Medical Research Future Fund, which has a target of $20 billion before research can begin.

A $5 co-payment will also be introduced for purchases of medicines covered by the Pharmaceutical Benefits Scheme, with concession card holders to pay a co-payment of 80 cents.

Unemployed youth will also be hit hard, with the age eligibility for Newstart to be increased from 22 to 25 years of age, and those below 30 to endure a six month wait before they can start receiving unemployment benefits.

“Young people should move into employment before they embark on a life on welfare,” Hockey said.

“Australians under 30 years of age should be earning or learning.”

Treasury figures show the unemployment rate is expected to peak at 6.25 per cent in 2014-2015.

The Treasurer has also signaled the introduction of two new taxes in to raise billions in revenue that, along with the billions in cuts, will attempt to “fix the budget”.

In his budget delivery speech in parliament, Hockey repeated his much-loved slogan that the “age of entitlement” was over.

“It has to be replaced, not with an age of austerity, but with an age of opportunity,” Hockey said.

A temporary debt levy of 2 per cent for around 400,000 Australians on incomes greater than $180,000 per year will be introduced for a three-year period to raise an expected $3.1 billion.

The fuel excise, which was frozen at 38.1 cents per litre under the Howard government, will be indexed to rise with inflation every six months and raise an estimated $2.2 billion to be channeled into infrastructure projects.

The government expects these measures will reduce the deficit to $29.8 billion by 2014-2015, $17.1 billion by 2015-2016, $10.6 billion by 2016-2017, and $2.8b by 2017-2018.

 

Want more? Check out Kemal Atlay’s detailed outline of the 2014 Budget

Kemal Atlay

The author Kemal Atlay

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