SYDNEY, May 12 (Reuters) - Australia will release a tough Federal Budget on Tuesday with cuts to welfare, new taxes and structural changes aimed at returning the economy to surplus within a decade.
For a related story, see
Following is a list of key proposals expected to appear in the budget according to pre-budget announcements and media reports. None of the following proposals has been confirmed.
TAX HIKE
- A temporary two percentage point tax increase on incomes over A$180,000 ($168,700) per year. The tax is expected to last four years and raise A$5 billion.
SPENDING CUTS
- More than 200 spending programs will be cut and thousands of government staff retrenched over the coming months. The Australian Taxation Office is expected to lose 3,000 positions.
PETROL TAX
- Petrol prices will rise between A$.01-.03 per litre over each of the next four years by lifting the fuel excise indexation freeze put in place by ex-Prime Minister John Howard in 2001. Expected to raise A$2.4 billion.
HEALTHCARE REFORM
- The introduction of co-payments for all doctor's visits. The amount of the co-payment will be means tested, but fees floated range from A$5 per visit to A$15 per visit.
PENSION REFORM
- Pension eligibility to be tightened. The disability support pension and carers payments may be subject to tighter eligibility requirements as well. Changes to the superannuation preservation age, the age at which people can access their super benefits, sees savings accumulate longer.
WELFARE REFORM
- Family tax benefits aimed primarily at single-earner families to be slashed. Also being mooted are a work-for-welfare system that may require young people receiving assistance to move to areas with more work.
AUSTRALIA NETWORK AXED
- The government-funded Australia Network, an overseas broadcaster designed as a tool of soft power in Asia, will be shuttered.
RETIREMENT AGE
- The budget will very likely lift the retirement age to 70 by 2035.
DEFENCE
- The government will likely keep its commitment to raising defence spending to 2 per cent of GDP.
EDUCATION
- A boost to the amount students contribute to their higher education costs. A recent government audit called for the government to cut its contribution to bachelor degree tuition costs from 59 percent to 45 percent.
INFRASTRUCTURE
- A A$10 billion infrastructure package is expected to offset the less popular cuts and tax increases above. About A$5 billion will be linked to a fund encouraging states to privatise their assets to access a 15 percent bonus payment.
PAID PARENTAL LEAVE
- A new scheme to provide six months of full salary for new parents earning up to A$100,000. The current scheme offers A$622.10 weekly before tax for a maximum of 18 weeks. It could cost up to A$5.5 billion per year when fully implemented and may be funded by a 1.5 per cent corporate levy.
PUBLIC SERVICE
- Abolish, merge or privatise 50 government agencies including the Royal Australian Mint. Expected net savings of A$470 million over 4 years and 160,000 jobs cuts.
CUSTOMS
- Merge Customs and Immigration into a new single agency called the Australian Border Force.
UNEMPLOYMENT BENEFITS
- Reintroduce work-for-the-dole scheme to be built over several years.
FAMILY & DISABILITY BENEFITS
- Tighten disability entitlements and family benefits.
($1 = 1.0670 Australian Dollars) (Reporting by Matt Siegel; Editing by Kim Coghill)
Our Standards: The Thomson Reuters Trust Principles.
