Federal Budget 2009/10

This year’s budget contains a number of changes that have implications for all Australians to some degree. It will take some time to assess the implications and as in past years many of the changes may be delayed in implementation or varied during the legislative process. 

Outcomes:

• Unemployment tipped to reach 8.5%
  
• $59.8 billion deficit
  
• Negative GDP next year - 0.5%
  
• GDP at 4.5% in 2015

Spending:

• Health infrastructure - $3.2 billion
• Education – 50,000 university places at $491 million over 4 years
• Environment – $3.5 billion for clean energy
• Infrastructure - $19.5 billion
• $618 million on Bruce highway from Cooroy to Curra, Queensland
• $884 million on Ipswich Motorway, Queensland 
• Broadband - $43 billion
  

Big announcements from this budget

Age Pensions - Increase

Changes from 20 September 2009 with:

• Single pensioner receiving another $32.49 per week
  
• Couple pensioners receiving another $10.14 per week

Eligibility for the Age Pension will be extended to age 67 by 2023.

The Centrelink income test reduction rate is to increase from 40 cents per dollar to 50 cents per dollar.

Superannuation – Reducing concessional caps

From 1 July 2009, the concessional contribution (before tax) limit will reduce to $25,000 per annum for people under age 50 and $50,000 per annum for people age 50 and over. In 2012 the limit will be $25,000 for all ages. 

Superannuation – Temporary reduction in government co-contribution

A maximum $1,000 co-contribution benefit for 2009 – 2012. 

First Home Buyers Grant - Extended

Eligible contracts between 1 July 2009 and 30 September 2009 will receive a total of $14,000 for established homes and $21,000 for new homes. 

Eligible contracts between 1 October 2009 and 31 December 2009 will receive a total of $10,500 for established homes and $14,000 for new homes.

Families – Parental leave

Low to middle-income families benefit with 18 weeks paid parental leave from 2011.

Private health insurance rebate – Tiered

Changes from 1 July 2010:

Singles income	Families income	under 65	65 to 69	70 and over	Medicare Levy Surcharge
Up to $75,000	Up to $150,000	30%	35%	40%	Nil
$75,001 - $90.000	$150,001 - $180,000	20%	25%	30%	1%
$90,001 - $120,000	$180,001 - $240,000	10%	15%	20%	1.25%
$120,001 and over	$240,001 and over	No rebate. 1.5% surcharge if no private health insurance			1.5%

Extension of Low Income Tax Offset - Affirmed 2008 Federal budget

The Low Income Tax Offset will increase from 1 July 2009 to $1,350 from $1,200. It will begin reducing from $30,000 taxable income and cut out at $60,000 taxable income. 

Taxation – Affirmed 2008 Federal budget tax cuts

Current – 2008/09		Proposed – 2009/10
Tax Rate	Threshold	Tax Rate	Threshold
0%	$1 - $6,000	0%	$1 - $6,000
15%	$6,001 - $34,000	15%	$6,001 - $35,000
30%	$34,001 - $80,000	30%	$35,001 - $80,000
40%	$80,001 - $180,000	38%	$80,001 - $180,000
45%	$180,001 and over	45%	$180,001 and over

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