Overview Our plan for a stronger economy - 2 April 2019 - Budget.gov.au
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Overview
Our plan for a stronger economy
2 April 2019
© Commonwealth of Australia 2019
ISBN 978-1-925504-97-2
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Contents
Our plan for a High-quality care for
stronger economy 2 older Australians 20
Budget at a glance 4 Safer communities 21
Returning the Restoring trust in the
budget to surplus 5 financial system 22
Global economic outlook 6 Keeping Australians safe
and our borders secure 23
Domestic economic outlook 7
Affordable, reliable and
Ensuring the Government sustainable energy 24
pays its own way 8
Infrastructure 26
Paying down debt 9
Unlocking the potential
Lower taxes for of our cities and regions 28
hard-working Australians
and small business 10 Planning for Australia’s
future population 29
Lower taxes for
hard-working Australians 12 Supporting the resilience
of our agriculture sector 30
Backing small business 14
Appendices
Integrity of the tax system 15
A — Budget aggregates 31
Investing in the health B — Revenue and spending 32
of Australians 16
C — Major Savings 33
Supporting healthy
D — Major Initiatives — Expense 34
communities 17
D — Major Initiatives — Revenue 35
Investing in the future
E — Detailed economic forecasts 36
of Australian students 18
F — Historical budget data 37
Delivering skills for today
and tomorrow 19
BU DGE T OVERVI EW
Our plan for a
stronger economy
The Government’s economic plan and this Budget are building a stronger
economy and securing a better future for all Australians. This Budget and
our economic plan are:
• Returning the budget to surplus
• Delivering more jobs
• Providing lower taxes
• Guaranteeing essential services like Medicare, schools, hospitals and roads
Guaranteeing the
essential services that
Australians rely on
• Strengthening Medicare, • Delivering improved • Restoring trust in the
funding more hospital student outcomes financial system
services and providing through record funding • Maintaining the
more affordable for schools integrity of our borders
medicines through • Ensuring older
record health funding • Keeping Australians
Australians have access safe by investing in
• Equipping Australians to high-quality and safe defence and national
with the skills for today aged care security agencies
and tomorrow including • Ensuring women,
delivering up to 80,000 children and people with
apprenticeships disability are safe in our
communities
2 BU D G E T OV ERVIEW
Lower taxes for
hard-working
Australians
• Immediate tax relief for • Backing small and • Making sure
low- and middle-income medium-sized multinationals pay
earners of up to $1,080 businesses through tax their fair share
for singles or up to relief and by increasing • Tackling the black
$2,160 for dual income and expanding access economy
families to ease the cost to the instant asset
of living write-off
Investing in economic
and community
infrastructure
• Record transport • Strengthening the • Planning for Australia’s
infrastructure investment freight and supply future population
of $100 billion over the chains that Australian • Supporting Australia’s
next decade businesses rely on farmers, businesses
—— Helping workers to get • Taking action to support and communities
between job sites more affordable, reliable and through natural
quickly, improving sustainable energy disasters
delivery times
by unlocking pumped
—— Getting Australian hydro storage through
families home sooner Snowy 2.0 and the
and safer Battery of the Nation
• Busting congestion, • Striking City and
with new road and rail Regional Deals to build
projects targeting the the future of our cities
worst affected areas and regions
around the country
BUDGE T OVERVI EW 3
Budget at a glance
The Government’s economic plan is delivering budget
surpluses, giving Australians more opportunities
Under the Government’s economic The Government is providing The Government is investing
plan, jobs are being created and the lower taxes for hard-working in economic and community
budget is returning to surplus. Australians, backing small business infrastructure, including $100 billion
and improving the integrity of in transport infrastructure projects
The 2019-20 Budget reinforces
the tax system. over the next decade.
the Government’s plan to invest
in Australia’s future by strengthening In this Budget, the Government is The Government’s Climate Solutions
the economy while keeping taxes providing additional tax relief of package will reduce emissions
low and guaranteeing essential $158 billion. This is on top of the whilst helping households and
services. $144 billion in tax cuts legislated businesses lower their energy bills.
in last year’s Personal Income
This includes more investment The Government is also taking
Tax Plan. The Government is
in a strong healthcare system, action to support farmers and their
also helping businesses reinvest,
more support for older Australians communities to recover and rebuild
employ more workers and grow, by
and more funding for education after natural disasters.
increasing and expanding access
and skills.
to the instant asset write-off.
Budget aggregates and major economic parameters(c)
Actual Estimates Projections
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Total(a)
Underlying cash balance ($b)(b) -10.1 -4.2 7.1 11.0 17.8 9.2 45.0
Per cent of GDP -0.5 -0.2 0.4 0.5 0.8 0.4
Net operating balance ($b) -4.0 8.5 12.9 18.2 28.8 20.6 80.4
Per cent of GDP -0.2 0.4 0.6 0.9 1.3 0.9
(a) Total is equal to the sum of amounts from 2019-20 to 2022-23. (b) Excludes expected net Future Fund earnings before 2020-21.
Outcomes Forecasts Projections
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23
Real GDP 2.8 2 1/4 2 3/4 2 3/4 3 3
Employment 2.7 2 1 3/4 1 3/4 1 1/2 1 1/2
Unemployment rate 5.4 5 5 5 5 5
Consumer price index 2.1 1 1/2 2 1/4 2 1/2 2 1/2 2 1/2
Wage price index 2.1 2 1/2 2 3/4 3 1/4 3 1/2 3 1/2
Nominal GDP 4.7 5 3 1/4 3 3/4 4 1/2 4 1/2
(c) Year-average growth unless otherwise stated. From 2017-18 to 2020-21, employment and the wage price index are through-the-year growth to the June quarter. The
unemployment rate is the rate for the June quarter. The consumer price index is through-the-year growth to the June quarter.
Source: ABS cat. no. 5206.0, 6202.0, 6345.0, 6401.0 and Treasury.
4 BU D G E T OV ERVIEW
Returning the budget
to surplus
Restoring the nation’s finances by charting a responsible
path to surplus
After more than a decade of The total turnaround in the budget The Government is reducing debt,
deficits, the budget returns to balance between 2013-14 and not through higher taxes, but by
surplus in 2019-20. 2019-20 is projected to be good budget management and
$55.5 billion, or 3.4 per cent of GDP. growing the economy.
It has been a long road from where
this process started when the The Government’s plan for By paying down debt, the
Government was first elected. a stronger economy ensures Government will put the nation’s
it can guarantee essential finances on a more sustainable
In 2013-14, some five years after
services while returning the footing and reduce the burden on
the Global Financial Crisis, the
budget to surplus. future generations. Net debt is
deficit was still the second highest
projected to be eliminated by
in Australia’s history. Since then, This budget year will see a surplus
2029-30.
the Government has made steady of $7.1 billion, equal to 0.4 per cent
progress to repair the budget and of GDP. The Government has the record and
chart a responsible path back to the plan to grow the economy, to
Budget surpluses will build in
surplus. guarantee essential services and to
size in the medium term and are
keep Australians safe and secure.
expected to exceed 1 per cent of
GDP from 2026-27.
First surplus in over a decade
Last 10 Years Next 10 Years
Underlying Cash Balance – Underlying Cash Balance –
per cent of GDP per cent of GDP
2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 2016-17 2017-18 2018-19 0.4 0.5 0.8 0.4 0.8 0.6 0.8 1.4 1.6 1.8
-4.2 -3.4 -2.9 -1.2 --3.0 -2.3 -2.4 -1.9 -0.5 -0.2 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29
BUDGE T OVERVI EW 5
Global economic
outlook
Growth in Australia’s major trading partners
remains solid but there are risks
Global growth strengthened in 2017 trading partners, with economies Uncertainties remain around trade
and into 2018, but moderated in the in the Asian region growing tensions, emerging market debt
second half of 2018. relatively strongly. vulnerabilities and geopolitical
issues. Australia will continue to
Unemployment rates in a number This is important for a number
promote and benefit from free and
of advanced economies are near of Australia’s exports. In addition
open trade.
record lows and there has been a to ongoing demand for mining
pick-up in wage growth in the United and rural exports, there is strong Over the past five and a half years,
States, euro area and Japan. demand from Asia for Australia’s total trade covered by free trade
tourism and education services. agreements has risen from around
Australia is expected to continue 26 per cent to around 70 per cent.
to benefit from growth in major
Growth in major advanced economies
5 Per cent, tty Per cent, tty 5
4 4
United States
3 3
euro area
2 2
1 1
0 0
Japan
-1 -1
-2 -2
Dec-13 Dec-14 Dec-15 Dec-16 Dec-17 Dec-18
Source: National statistical agencies and Refinitiv.
6 BU D G E T OV ERVIEW
Domestic economic
outlook
Australia’s economy is fundamentally sound, supporting
solid jobs growth
Australia’s economy is on track to Solid employment growth is Consumer spending, investment
record its 28th consecutive year of expected to continue. As spare by businesses and continued
annual economic growth and its capacity in the labour market demand for Australian exports
fundamentals are sound. continues to be reduced and are all expected to contribute to
economic growth strengthens, economic growth. Residential
Australia’s economy is supporting
wage growth is expected to pick up. construction activity is expected
solid jobs growth, with more than
to fall following recent declines
1.2 million jobs created since Significant weather events including
in housing prices and building
September 2013. drought and floods are weighing on
approvals partly in response to a
economic growth in 2018-19. The
Strong employment growth in recent rebalancing of supply and demand.
Government is committed to helping
years has been accompanied by
individuals and local communities to The Government’s personal income
high participation rates, particularly
recover and rebuild following natural tax relief measures, ongoing delivery
for women. The unemployment rate
disasters and severe drought. of essential services and its
has declined to 4.9 per cent. Youth
$100 billion transport infrastructure
labour market outcomes have also Australia’s economy is forecast to
plan over the next decade will also
improved recently. grow by 2¾ per cent in 2019-20
support economic growth.
and 2020-21.
Unemployment rate
8 Per cent Per cent 8
7 7
6 6
5 5
4 4
3 3
Feb-1999 Feb-2003 Feb-2007 Feb-2011 Feb-2015 Feb-2019
Source: ABS cat. no. 6202.0.
BUDGE T OVERVI EW 7
Ensuring the Government
pays its own way
The Government’s economic plan returns the
budget to surplus
For the first time in more than Government spending remains The Government is also keeping
a decade, the Government is focused on delivering high quality taxes as a share of GDP within
delivering a budget surplus of essential services but careful the 23.9 per cent cap, limiting the
$7.1 billion in 2019-20. targeting sees payments as a tax burden on Australians.
share of GDP returning to below
Sustained fiscal discipline The Government’s responsible fiscal
long-run average levels.
will ensure surpluses build management ensures Australia is
over the coming years and In achieving this, the Government’s better equipped to deal with future
exceed 1 per cent of GDP in average real spending growth is challenges and to reduce the fiscal
the medium term. expected to be the lowest of any burden on future generations.
Commonwealth government in
over 50 years.
Total payments falling Tax-to-GDP within the
below 30-year average 23.9 per cent cap
Per cent of GDP Per cent of GDP Per cent of GDP Per cent of GDP 25
26.0 26.0 25
Tax speed limit
25.5 25.5 23 23
Long-run average 21 21
25.0 25.0
24.7 per cent
24.5 24.5 19 19
24.0 24.0 17 17
23.5 23.5 15 15
2013-14 2016-17 2019-20 2022-23 1973-74 1987-88 2001-02 2015-16 2029-30
8 BU D G E T OV ERVIEWPaying down debt
The Government is on track to eliminate net debt
With the budget moving into Government’s financial position Gross debt peaked in 2017-18
surplus, the Government is now substantially improve over the at less than 30 per cent of GDP.
paying down debt. medium term. Over the medium term, it is
projected to fall below the 30-year
Reducing debt will ensure that the The Government is focused on
average to 12.8 per cent of GDP.
nation’s finances remain sustainable reducing net debt as a share of
and that we are prepared for future the economy, which is expected Net financial worth is also
challenges. to peak in 2018-19 at 19.2 per cent projected to improve over time,
of GDP. consistent with the Government’s
It will also ensure that future
fiscal strategy.
generations are not burdened The Government is on track to
as a result of today’s spending. eliminate net debt by 2029-30.
The Government’s ongoing The Government is also reducing total
commitment to strong fiscal borrowing (gross debt) as a share of
management will see the the economy over time.
Eliminating Net Debt
Per cent of GDP
Forward estimates Medium-term projections
5
19.2 18.0 16.8 15.3 14.4 11.8 10.0 8.2 6.3 4.1 2.1 0.0
0
2018-19 2019-20 2020-21 2021-22 2022-23 2023-24 2024-25 2025-26 2026-27 2027-28 2028-29 2029-30
BUDGE T OVERVI EW 9Lower taxes for
hard-working Australians
and small business
A better tax system for you
The Australian Government including big business and rely on. Australians rely on a strong
is lowering taxes for working multinationals, pay their fair share. economy so that they have a job,
Australians and backing small so they can pay their bills, so they
The Government has a plan for a
and medium‑sized business, can save and invest. Lower taxes
stronger economy, so that it can
while ensuring all taxpayers, encourage work, investment and
guarantee the services Australians
reward aspiration.
Lower taxes
for workers
Stronger
economy
Lower taxes
for small
business
Cracking
down on tax
avoidance
10 BU D G E T OV ERVIEWLower taxes for The Government is also increasing Making multinationals
hard-working tax thresholds further, and
and big business pay
reducing the 32.5 per cent tax
Australians rate to 30 per cent. Under the their fair share
The Government is lowering taxes. enhanced plan Australians can Australia now has amongst the
Disciplined fiscal management earn more knowing that their toughest laws in the world to
has enabled the Government to extra income will not be taxed combat corporate tax avoidance.
build on its Personal Income Tax at a higher marginal rate. The Government will continue to
Plan to provide lower and simpler
take strong action to protect the
taxes. Backing small integrity of our tax system.
In this Budget, the Government business
is more than doubling the The Government is also clamping
The Government is also
maximum relief for low- and down on the black economy and
delivering lower taxes for small
middle-income earners to ease and medium-sized businesses. will strengthen the Australian
cost of living pressures and This means businesses will keep Business Number (ABN) system
support consumption growth. more of their own money – that to help level the playing field for
Low- and middle-income earners is money that will allow them to all businesses.
will have their tax reduced by up reinvest in their business, employ
to $1,080 for single earners or more workers and grow.
up to $2,160 for dual income
families.
BUDGE T OVERVI EW 11Lower taxes for
hard-working Australians
Building on our Personal Income Tax Plan
Our tax system provides reward earners of up to $1,080 for rate of the middle tax bracket from
for effort. single earners or up to $2,160 32.5 per cent to 30 per cent.
for dual income families.
The Government is delivering Together with the legislated
Around 4.5 million individuals
a better tax system through abolition of the 37 per cent tax
will receive the full benefit
its Personal Income Tax Plan bracket, this change will mean
for the 2018-19 income year.
that 94 per cent of taxpayers are
introduced in last year’s Budget.
Tax relief for low- and middle-income projected to face a marginal tax
Disciplined fiscal management has
earners will support consumption rate of 30 per cent or less in
allowed the Government to
growth and ease cost of living 2024-25.
enhance its plan in this year’s pressures. This additional relief
Budget, ensuring that working The Government’s enhanced plan
is more than double what was
Australians share in the benefits maintains a progressive income tax
provided in last year’s Budget.
of economic growth. system that also rewards effort and
In 2024-25, the Government will contributes to a strong economy.
Immediate tax relief will flow make a further structural change
to low- and middle-income to the tax system by reducing the
The new targeted offset will benefit over 10 million low- and middle-income earners
$90,001 to $126,000
Tax relief gradually reduces
from $1,080 to $0
1.6 million taxpayers
Full tax relief
Taxable income
$48,000 to $90,000
of $1,080
4.5 million taxpayers
Tax relief between
$37,001 to $47,999 $255 and $1,080
1.7 million taxpayers
Up to $37,000 Tax relief of up to $255
2.3 million taxpayers
12 BU D G E T OV ERVIEWImmediate relief to Rates from 2024-25 New thresholds from 2024-25
low- and middle-income Nil Up to $18,200
earners 19 per cent $18,201 – $45,000
The Government will increase the 30 per cent $45,001 – $200,000
maximum benefit of the low and 45 per cent Above $200,000
middle income tax offset from $530 Low income tax offset Up to $700
to $1,080 for singles, or up to $2,160
for dual income families for the
2018-19 to 2021-22 income years. Structural reforms tax rate of 30 per cent. As a result
to the tax system to of the Government’s reforms
The base amount will also increase
individuals can take on additional
from $200 to $255. A projected deliver lower taxes work should they wish, or seek a
4.5 million taxpayers will receive the
From 1 July 2024, the Government promotion knowing that their extra
full offset in 2018-19 after they lodge
will reduce the 32.5 per cent tax rate income will not be taxed at a higher
their tax returns.
to 30 per cent, more closely aligning marginal tax rate.
the middle tax rate with corporate
Locking in the benefits tax rates and increasing the reward The tax system will remain
of lower taxes for effort. progressive, with those who earn
more contributing more. For
From 2022-23, the Government will This builds on the changes the example, an individual with taxable
lock in the additional tax relief to Government made under last income of $200,000 in 2024-25
low- and middle-income earners by year’s Personal Income Tax Plan, earns 4.4 times more income than
increasing the top threshold of the which abolishes the 37 per cent an individual with taxable income
19 per cent tax bracket from $41,000 tax bracket from 1 July 2024. of $45,000, but will pay around
to $45,000 and the low income tax Australians earning from $45,000 to 10 times more tax.
offset from $645 to $700. $200,000 will then face a marginal
2024-25 with the Government’s plan:
Proportion of taxpayers in each tax bracket
Tax rate Tax rate 30% Tax rate
19% 45%
24%
Up to $45,000
70% Average
full-time
6%
Over $200,000
$45,001 to $200,000 earnings*
2% 62% 36%
Share of personal tax paid
* Average full-time earnings includes both males and females, and excludes earnings from overtime work
BUDGE T OVERVI EW 13Backing small business
Small businesses are the engine room of the economy
The Government is building a accelerates its plan to deliver lower will benefit around 3.4 million
better tax system for Australian tax rates. Similar timing applies to businesses employing around
businesses. the increases in the unincorporated 7.7 million workers.
small business tax discount rate,
Small and medium-sized businesses The threshold applies on a per asset
which will increase to 16 per cent by
are benefitting from lower taxes and basis so eligible businesses can
2021-22 (up to the cap of $1,000). instantly write off multiple assets.
better incentives.
The Government is increasing the More than 350,000 businesses have
The company tax rate for small instant asset write-off threshold already taken advantage of the
and medium-sized companies with to $30,000 and expanding access instant asset write-off. Businesses
an annual turnover of less than to medium-sized businesses with will be able to benefit from the
$50 million has been lowered to instant asset write-off as they grow,
an annual turnover of less than
27.5 per cent. This rate will be providing a direct incentive
$50 million. These changes will
to reinvest in their business.
lowered further to 25 per cent apply from 7:30pm (AEDT) on
by 2021-22 as the Government 2 April 2019 to 30 June 2020 and
Lower Taxes for Small Business
Fast tracking Higher tax discount rates Increasing and expanding
lower company tax rates for unincorporated small the instant asset write-off
businesses (up to $1,000)
Individual assets less than:
$25,000
$25,000 $30,000
Turnover less than:
27.5% 26% 25% 8% 13% 16%
$25,000
$10m $50m
2019-20 2020-21 2021-22 2019-20 2020-21 2021-22
Supporting 3.4 million businesses with 7.7 million workers
14 BU D G E T OV ERVIEWIntegrity of the
tax system
Making multinationals and big business pay
their fair share
The Government is committed The Government has also taken $6.5 billion in liabilities and an extra
to maintaining the integrity and action to tackle the black economy $3.5 billion in collections. Extending
sustainability of Australia’s tax in its many forms, estimated to the Taskforce’s operations will build
system where everyone pays their return over $5 billion to the Budget upon the positive results achieved
fair share of tax. to fund essential services. so far.
Multinational tax avoidance and The Government will also provide
the black economy undermine the
What more are $42.1 million over four years to the
integrity of our tax system and we doing? ATO to increase activities to recover
unfairly raise the burden on honest The Government is providing unpaid tax and superannuation
individuals and businesses. more than $1 billion to extend liabilities including from large
the operation of the ATO’s Tax corporate entities and high wealth
What we have achieved Avoidance Taskforce, and to expand individuals.
the Taskforce’s programs and
Australia is a leader in global Additionally, the Government will
market coverage. This measure is
efforts to prevent multinational strengthen the Australian Business
estimated to raise $4.6 billion in
tax avoidance. Our tax integrity Number (ABN) system. This
liabilities over the forward estimates
laws are amongst the toughest in measure will target ABN misuse,
period and will help ensure that
the world. Since 1 July 2016, the enhance the quality of Australian
multinationals, big business and
Australian Taxation Office (ATO) has Business Register data and improve
high wealth individuals pay the right
raised $12.9 billion in tax liabilities ABN holder engagement and
amount of tax in Australia.
against large public groups and compliance, estimated to result in an
multinationals, as well as wealthy To date, the Taskforce has additional $22.2 million gain to the
individuals and associated groups. helped the ATO raise an additional budget over the forward estimates.
BUDGE T OVERVI EW 15MED
Investing in the GUAR ICARE
ANTE
ED
health of Australians
Investing in primary care, hospitals and medicines
The Government is committing The Government is also providing Delivering more
record funding to health, with total $187 million to increase patient hospital services
investment expected to increase rebates for 119 GP service items on
from $81.8 billion in 2019-20 to the MBS from 1 July 2019. Commonwealth funding for public
$89.5 billion in 2022-23. hospitals is increasing in every year.
In addition, the Government is
fighting the prevalence of heart The $1.3 billion Community Health
Guaranteeing Medicare disease by introducing a new item and Hospitals Program is boosting
The Government is continuing to on the MBS for heart health checks health services across Australia
guarantee and strengthen Medicare and providing funding to HeartKids in four priority areas: hospital
to ensure that Australians can Australia for the Childhood Heart infrastructure; drug and alcohol
access affordable and quality Disease National Action Plan. treatments; preventative health,
healthcare. primary care and chronic disease
A new $448 million primary care management; and mental health.
To help patients with out-of-pocket funding model will offer improved
costs, the Government is providing care for Australians with complex More affordable
$309 million to improve access to and chronic conditions.
diagnostic imaging. This includes
medicines
access to Magnetic Resonance Patients across Australia will This Budget is providing
Imaging (MRI) scans for patients have better access to lifesaving $331 million for new and amended
with breast cancer and increasing MRI scans, with the Government listings on the Pharmaceutical
patient rebates for ultrasound and investing a total of $379 million Benefits Scheme (PBS), including
x-ray diagnostic imaging items on since 2018 for 53 new MRI licences. life-changing medicines to treat
the Medicare Benefits Schedule lung, bladder, kidney and skin
(MBS) from 1 July 2020. cancers, and leukaemia.
16 BU D G E T OV ERVIEWSupporting healthy
communities
Investing in the next generation of life saving
technologies, prioritising mental health and supporting
active and healthy communities
World-class research The Government is investing Comprehensive
$737 million over seven years for drug strategy
The Government’s $5 billion Ten
mental health, including $461 million
Year Investment Plan for the Medical Through its $337 million
to help young people. This funding
Research Future Fund is providing comprehensive drug strategy,
will reduce waitlists for youth mental
support for world class medical the Government is helping to
health services, address youth
research, more clinical trials and the prevent and minimise the harmful
suicide and provide a range of new
development of health innovations. effects of ice, alcohol, tobacco
community support services.
The Plan includes $614 million and other drugs, including opioids.
for rare cancers and diseases, The Strategy will increase access
$220 million for cardiovascular More active Australia
to services outside metropolitan
health, $605 million for clinical The Government is providing areas, fund local family drug support
infrastructure and $150 million for $386 million to encourage more services, and include measures to
stem cell research. Australians to participate in sport, target opioid use.
upgrade sporting infrastructure and
Prioritising support elite sport.
mental health
Mental illness impacts every
Australian community and
touches many families.
BUDGE T OVERVI EW 17Investing in the future of
Australian students
Delivering record funding and improving
student outcomes
Schools Local School before school, helping to prepare
Community Fund children for their future school
The Government is delivering record
education.
funding for schools to improve Because no one knows the needs of
student outcomes and drive a local school better than the school
excellence in our classrooms. Investing in our
community itself, the Government
is providing $30.2 million in 2019-20 universities
Recurrent funding for schools
under the Local School Community The Government is committed
will reach $19.9 billion in 2019, with
Fund. This initiative will allow school to a world-class higher education
average Commonwealth funding
communities to identify their own system and is investing $17.7 billion
per student having increased from
priorities, such as upgrades to in the university sector in 2019.
$3,755 in 2014 to $5,097 in 2019.
classrooms, play equipment and This is projected to grow to more
By 2029, this funding will grow to
other school amenities. than $20 billion by 2024.
$32.4 billion, an increase of
63 per cent. In this Budget, the Government is
Preschools providing $93.7 million over four
All school sectors will benefit
The Government is continuing years from 2019-20 for scholarships
with increased funding for public,
to support access to preschool for students to study at a regional
Independent and Catholic schools
education and will invest campus of a university or vocational
in every year.
$453 million to extend support education training provider.
Under our guaranteed commitments, for the 2020 school year. This will
all schools — public, Independent ensure universal access to a quality
and Catholic — will be funded on a preschool education in the year
consistent basis of student need.
18 BU D G E T OV ERVIEWDelivering skills for today
and tomorrow
Equipping Australians for the jobs of the future
The Government has a plan to build A responsive and flexible VET • deliver foundational literacy,
on the more than 1.2 million jobs system will equip Australians with numeracy and digital skills
created since September 2013. the skills they need today and in across Australia
This plan will ensure all Australians the future. It will deliver the skilled
• connect schools, local industries
have the skills needed for the jobs workers needed by Australian
and young people in areas of
of today and tomorrow. businesses.
high youth unemployment to
The Government is investing The Government’s Delivering Skills prepare them for working life,
over $525 million to upgrade the for Today and Tomorrow package of through ten new Training Hubs
vocational education and training reforms will:
• provide vital career and
(VET) sector.
• deliver up to 80,000 new training information
Technological change is apprentices in occupations
experiencing skill shortages • drive long-term reform of VET
transforming the nature of work
through an Additional Identified by providing consistent national
for millions of Australians. New
Skills Shortage Payment leadership through a National
industries are emerging and existing
Skills Commission.
industries are evolving, increasing • partner with industry in
demand for new skills. As the nature
developing new qualifications
of work changes, Australians are
to meet the demand for skills in
expected to work in more jobs over
the future through national Skills
their career.
Organisations
BUDGE T OVERVI EW 19High-quality care for
older Australians
Record investment in aged care
Supporting older an end-to-end compliance As the Royal Commission into Aged
Australians in their framework for home care, and Care Quality and Safety goes about
Australians with dementia or its critical work, the Government
own homes requiring cognitive support will is taking immediate action to raise
The Government is investing benefit from additional funding for safety and quality standards.
$282 million to support Australians home care supplements.
The Government is providing
who wish to stay at home for $1.5 million to develop a Serious
longer by providing an additional Supporting safe and Incident Response Scheme and
10,000 home care packages across quality residential care $8.4 million to introduce mandatory
all levels. The Government is making an reporting against national residential
This brings to 40,000 the number of additional 13,500 residential care quality indicators.
additional home care packages the care places available from
Government has delivered since the 2018-19 — the largest number ever Acting on abuse of
2017-18 MYEFO. in a single funding round. In addition, older Australians
the Government is providing
The number of people with a high The Government has launched the
$60 million for residential care
level home care package has National Plan to Respond to the
infrastructure.
increased by 74 per cent between Abuse of Older Australians, including
June 2017 and September 2018. The Government is providing a $18 million to support frontline
$320 million general subsidy boost services, and a new National Hotline
In addition, the Government is in 2018-19 for residential aged care. (1800 ELDERHelp or 1800 353 374).
investing $7.7 million to develop
20 BU D G E T OV ERVIEWSafer communities
Ensuring women, children and those with disability are
safe within our communities
Improving domestic and Supporting the Providing safe places Funding a Royal
family violence support 1800RESPECT for women and children Commission to examine
services and delivering counselling service violence, abuse, neglect
prevention initiatives and exploitation of
people with disability
Addressing domestic • $64 million for 1800RESPECT, Subject to the finalisation
violence the national sexual assault, of the terms of reference
domestic and family violence and consideration by the
Addressing violence against women counselling service Governor-General, the Government
and children is vital to keeping is providing $528 million over
Australian families strong and safe. • $35 million in support and
five years to fully fund a Royal
prevention strategies for
The Government is providing Commission to examine violence,
Aboriginal and Torres Strait
$328 million over four years from abuse, neglect and exploitation of
Islander people. people with disability.
2018-19 to deliver its Fourth Action
Plan under the National Plan to The Fourth Action Plan complements A Royal Commission will make
Reduce Violence against Women and the work of states and territories recommendations on actions
their Children 2010-2022, investing: and stakeholders — recognising governments, institutions and
• $82.2 million to improve and that real change requires concerted the community can take to better
and sustained effort by all. protect these Australians. It will
build on frontline services to
keep women and children safe place people with disability at
Protecting people the centre.
• $78.4 million to provide safe with disability
places for people impacted by The Government is working
domestic and family violence People with disability should be closely with state and territory
able to live free from violence, governments, the disability sector
• $68.3 million in domestic and abuse, neglect and exploitation. and people with disability in
family violence prevention finalising the terms of reference.
strategies
BUDGE T OVERVI EW 21Restoring trust in the
financial system
Delivering better consumer and small business outcomes
The Royal Commission into Building on its previous reforms restore trust in the financial sector,
Misconduct in the Banking, and strengthening of regulators, including:
Superannuation and Financial the Government is taking action • over $400 million to ASIC to
Services Industry delivered its on all 76 Royal Commission support its new enforcement
landmark Final Report on recommendations and, in a number and supervisory strategies and
1 February 2019. of important areas, is going further. expanded remit
Commissioner Hayne found that Our reforms will improve consumer • over $150 million to APRA to
too often the conduct within our outcomes, ensure we have strong strengthen supervision and
financial institutions has been in and effective regulators, increase enforcement
breach of existing laws and fallen accountability within financial
• over $35 million for a new
below community expectations. institutions and provide better
criminal jurisdiction of the
redress for consumers and small
All Australians have the right to be Federal Court.
businesses harmed by misconduct.
treated fairly and honestly in their
Restoring trust in the financial
dealings with financial institutions. The Government is providing
system is part of our plan for a
It is fundamental that all Australians more than $640 million to help
stronger economy.
can trust the financial system.
Key Government policies improving the financial system for all Australians
Improving Improving Ensuring Promoting
consumer access to Enhancing effective competition
outcomes redress accountability regulators and innovation
• Banning excessive • Establishing the • Significantly • Significantly • Introducing Open
credit card surcharges Australian Financial broadening and increasing ASIC’s and Banking reforms
Complaints Authority increasing civil and APRA’s powers
• Requiring mortgage (AFCA) and extending criminal penalties • Establishing
brokers to act in their its remit to allow • Providing ASIC and comprehensive credit
client’s best interests consideration • Creating the APRA with record reporting
of complaints Banking Executive levels of funding
• Protecting retirement Accountability Regime • Removing barriers
savings from dating back to • Creating a Financial to entry for new
1 January 2008 and extending it
undue erosion to superannuation Regulator Oversight ‘challenger’ banks
by inappropriate • Establishing a funds and insurance Authority
insurance premiums compensation scheme companies
and excessive fees • Appointing a second
of last resort ASIC Deputy Chair
who will lead ASIC’s
Office of Enforcement
22 BU D G E T OV ERVIEWKeeping Australians safe
and our borders secure
The Government is committed to keeping Australians safe
Secure borders A record $200 billion investment in Putting Veterans and their Families
Australia’s defence capability over First program and the Government’s
The Government is committed
the next decade will strengthen the $278 million investment in this
to protecting Australia’s borders,
capacity of the Australian Defence program in the last two budgets.
combating people smuggling in
Force, create jobs and open up new
our region and deterring people
from risking their lives at sea. In
opportunities for Australia’s defence Enhancing cyber
industry. security
this Budget, the Government is
continuing to invest in Operation The Government is bolstering
Sovereign Borders to reinforce the Putting Veterans and
investment in our cyber security
security of Australia’s borders. their Families First strategy to strengthen the defences
The Government is improving of government IT systems to
Defending Australia the wellbeing of veterans and address key security vulnerabilities
The Government is investing to their families by providing early and improve our ability to quickly
keep Australia safe and secure. access to services, simplified respond to cyber attacks.
Defence spending will reach access to treatment and improved
2 per cent of GDP in 2020-21. care for veterans with complex
circumstances. This continues the
BUDGE T OVERVI EW 23Affordable, reliable and
sustainable energy
Putting downward pressure on power bills
The Government is taking action 175 hours of storage which can electricity transmission connection
to support affordable, reliable and meet the peak demand of up to between Tasmania and Victoria.
sustainable energy. 500,000 homes. This will unlock Tasmania’s hydro
capacity and support more
Snowy Hydro 2.0 Battery of the Nation sustainable and reliable electricity
and Marinus Link for homes and businesses.
The Government has given the green
light to the Snowy 2.0 project by Partnering with the Tasmanian The hydro projects of Snowy 2.0
committing to a $1.4 billion equity Government, the Federal and the Battery of the Nation will
injection. The project will firm up Government is accelerating the support more affordable, reliable
intermittent renewable energy by Battery of the Nation and Marinus and sustainable power to the
bringing 2000 MW of new renewable Link projects by providing National Electricity Market.
pumped hydro capacity into the $56 million for the Marinus
system that will provide up to Link interconnector – a second
24 BU D G E T OV ERVIEWUnderwriting new Government’s $2 billion Climate and affordable power to regional and
generation investments Solutions Fund will help reduce remote communities.
greenhouse gas emissions. It will
The Government is delivering also support jobs for Indigenous Helping with power bills
a program to underwrite new communities and diversify regional
generation investment. This will The Government will provide
economies.
support increased competition in $284 million for a one-off, income
the National Electricity Market tax exempt payment to over
Priority Transmission 3.9 million Australians to assist with
and help reduce wholesale
electricity prices. Taskforce their next power bills and cost of
The Government is establishing a living expenses. The payment of $75
The Government has agreed to Priority Transmission Taskforce for singles and $125 for couples will
a shortlist of 12 projects which to support timely delivery of be made to those eligible for certain
represents a combined capacity transmission projects from the social security payments.
of 3,818 MW. This is equivalent Australian Energy Market Operator’s
to around seven per cent of the Integrated System Plan. The plan Opening up gas from
National Electricity Market. forecasts transmission requirements the Beetaloo Basin
for the National Electricity Market
Climate Solutions Fund The Government will provide
over the next 20 years.
$8.4 million to help speed up gas
Our Climate Solutions Package supplies from the Northern Territory
will help ensure Australia meets Micro-grids to the east coast market by opening
its emissions target under the The Government is supporting up the Beetaloo sub-basin for
Paris Agreement. feasibility studies for micro-grids exploration and development.
Building on the success of the which would harness distributed
Emissions Reduction Fund, the generation to provide secure, reliable
BUDGE T OVERVI EW 25Western Australia
New projects of $1.6 billion, including:
Infrastructure
• Tonkin Highway $349 million
• Fremantle Traffic Bridge $115 million
• Albany Ring Road $140 million
• Urban Congestion Fund $122 million
The Government is increasing • Roads of Strategic Importance (North)
$393 million
its infrastructure investment to • Roads of Strategic Importance (South)
$100 billion, busting congestion $142 million
and ensuring our towns and
regions are better connected
National initiatives
A new Road Safety Package $2.2 billion
Urban Congestion Fund increased from $1 billion
to $4 billion including a new Commuter Car Park
Fund $500 million
Roads of Strategic Importance funding increased
from $3.5 billion to $4.5 billion
Major Project Business Case Fund $250 million
Fast rail plan
$2 billion to help deliver fast rail from Geelong to Melbourne
Establishing the National Faster Rail Agency
Fast rail business cases for Sydney to Newcastle, Sydney
to Wollongong, Sydney to Parkes (via Bathurst and Orange),
Melbourne to Greater Shepparton, Melbourne to Albury
Wodonga, Melbourne to Traralgon, Brisbane to the regions
of Moreton Bay and the Sunshine Coast, and Brisbane to the
Gold Coast South Australia
New projects of $2.6 billion, including:
• North-South Corridor $1.5 billion
Major Projects Underway • SA Regional Roads Package $260 million
• Urban Congestion Fund $341 million
Melbourne to Brisbane Inland Rail $9.3 billion • Roads of Strategic Importance
Western Sydney (Nancy-Bird Walton) International $220 million
Airport $5.3 billion
Melbourne Airport Rail Link $5 billion
26 BU D G E T OV ERVIEWNorthern Territory
New projects of $622 million, including:
• Roads of Strategic Importance
$492 million
Queensland
New projects of $4 billion, including:
• Bruce Highway $425 million
• Gateway Motorway (Bracken Ridge to Pine River) $800 million
• Warrego Highway $320 million
• Urban Congestion Fund $379 million
• Roads of Strategic Importance (North) $824 million
• Roads of Strategic Importance (South) $186 million
NSW
New projects of $7.3 billion,
including:
• M1 Pacific Motorway
Extension to Raymond Terrace
$1.6 billion
• Western Sydney Rail
$3.5 billion
• Princes Highway $500 million
• Urban Congestion Fund
$254 million
• Roads of Strategic Importance
$496 million
ACT
New projects of $50 million
Victoria
New projects of $6.2 billion,
including:
• Suburban Roads Upgrades
(South Eastern and Northern
Roads) $1.1 billion
• South Geelong to Waurn
Tasmania Ponds Rail $700 million
New projects of $313 million, including: • Western Highway (Final Stage
• Tasmanian Freight Rail Revitalisation of Duplication from Ararat to
Program $68 million Stawell) $360 million
• Urban Congestion Fund $35 million • Urban Congestion Fund
• Roads of Strategic Importance $396 million
$210 million • Roads of Strategic Importance
$490 million
BUDGE T OVERVI EW 27Unlocking the potential
of our cities and regions
Governments cooperating to secure the future
of our cities and regions
The Government is delivering City The Government is providing a in improved internet and mobile
Deals with a total Commonwealth further $200 million for a fourth services through the Stronger
commitment of $5.7 billion to assist round of the Building Better Regional Connectivity Package.
urban and regional communities to Regions Fund, bringing combined
The Government’s $100 million
reach their full potential. total funding including the
investment in regional airport
National Stronger Regions Fund
Building on the success of the City infrastructure upgrades will improve
to $1.5 billion. This will create jobs,
Deals model, the Government is also airport safety and access across
drive economic growth and build
rolling out Regional Deals. These regional Australia.
stronger regional communities.
will build on more than $3 billion of
Government investment in regional Regional Australia will also benefit
communities since 2013. from a new $220 million investment
Deals being delivered
Townsville Darwin Geelong
Delivering catalytic infrastructure Delivering transformational Supporting Geelong’s continued
to drive private investment and investments to showcase economic diversification, growing
support jobs. Darwin as a great place to live, the visitor economy and building
work and study. a thriving city centre.
Launceston
Helping Launceston to become one
Hobart Adelaide
of Australia’s most liveable and Solidifying Hobart as the Growing Adelaide as an
innovative regional cities. gateway to the Antarctic innovative and vibrant city,
and Southern Ocean while building on its standing as
Western Sydney improving liveability, vibrancy a centre for arts and culture.
and connectivity.
Improving connectivity, creating
jobs and enhancing liveability,
building on the investment in the
Western Sydney Airport.
Upcoming deals Upcoming regional deals
Perth Barkly Hinkler (Bundaberg
Building on the joint government Delivering a blueprint for the and Hervey Bay
investment in METRONET. economic, social and cultural Region)
future of the Barkly region.
South East Queensland Developing a plan for
Albury Wodonga economic development
Improving the region’s global to ensure the region
competitiveness and connectivity, Developing a strategic plan to can reach its maximum
and enhancing the region’s lifestyle. form the basis of the deal. potential.
28 BU D G E T OV ERVIEWPlanning for Australia’s
future population
A plan to manage population growth in cities
and support the regions
The Government is taking action planning across governments and domestic and international students
to ensure population growth is more infrastructure are put in place to study in regional Australia under a
sustainable through changes to the to manage long-term population new Destination Australia Program.
migration program and investments growth and settlement across
The Commonwealth is working
to reduce congestion in cities and Australia.
with states, territories and local
accommodate growth in regions.
The Government will introduce two governments to develop a national
The Government is increasing new regional provisional visas to approach to population planning and
support for migrants to become encourage more migrants to settle management.
established and integrated in their and remain in regional areas. These
communities through an additional visas will enable skilled migrants to
$64.2 million for new social contribute to regional economies,
cohesion measures. with a pathway to permanent
residency at the end of a three
The Government has decided to
year period.
reduce the permanent migration
program ceiling by a cumulative To attract Australian and
120,000 places over four years. international students to study
This is designed to reduce pressure in regions, the Government will
on Australia’s major cities while provide $93.7 million over four years
new arrangements for improved from 2019-20 for scholarships for
BUDGE T OVERVI EW 29Supporting the resilience
of our agriculture sector
The Government is providing immediate and targeted
relief to Australian farmers dealing with the impacts of
natural disasters
Helping flood-affected The Government recognises that The Government is helping
many will find it hard to meet their struggling families pay their bills by
farmers
loan commitments until they get increasing their access to income
The Government has responded back on their feet. The Regional support and by providing $35 million
quickly to support farmers and Investment Corporation will help to charities in drought-affected
communities devastated by flood affected farmers to refinance communities.
the North Queensland floods their existing debts.
The Government is providing
and weather events. $232 million
The Government is also working $29 million of funding for increased
has been made available to help
with banks to provide up to mental health and wellbeing
North Queenslanders affected $1.8 billion of low-cost loans to support for farmers in hardship in
by these disasters. support banks offering lower interest drought-affected communities.
The Government is also creating rates to eligible flood-affected
a new $3.9 billion Emergency primary producers. The Government Building resilience
is helping flood-affected schools The Government is investing
Response Fund to provide an
and students, providing $4 million in $3.9 billion in the Future Drought
additional sustainable source of
financial assistance in 2018-19. Fund to prepare for future droughts.
funding for recovery from natural
disasters. The Fund will grow to $5 billion over
Easing the burden the next decade and enable the
The recent floods particularly of drought Government to invest $100 million
impacted the cattle industry. Drought still affects many each year in water infrastructure and
The Government will provide up farmers throughout the country. drought resilience.
to $300 million in grants to help The Government is providing
flood-affected farmers rebuild $6.3 billion in assistance and
damaged farm infrastructure, concessional loans to support
replace livestock and replant crops. those affected by drought.
30 BU D G E T OV ERVIEWAppendix A
Budget aggregates
The table below shows the main cash and accrual budget aggregates for
the Australian Government general government sector over the period
from 2017-18 to 2022-23. The underlying cash surplus is estimated to
be $7.1 billion in 2019-20. The net operating surplus is estimated to be
$12.9 billion in 2019-20
Actual Estimates Projections
2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Total(a)
$b $b $b $b $b $b $b
446.9 485.2 505.5 522.3 551.0 566.9 2,145.7
Receipts
24.2 25.0 25.2 25.1 25.4 25.0
Per cent of GDP
452.7 482.7 493.3 511.3 533.2 557.7 2,095.6
Payments(b)
24.5 24.9 24.6 24.6 24.5 24.5
Per cent of GDP
4.3 6.6 5.1 na na na 5.1
Net Future Fund earnings(c)
-10.1 -4.2 7.1 11.0 17.8 9.2 45.0
Underlying cash balance(d)
-0.5 -0.2 0.4 0.5 0.8 0.4
Per cent of GDP
456.3 495.8 513.8 534.3 564.7 580.5 2,193.2
Revenue
24.7 25.6 25.6 25.7 26.0 25.6
Per cent of GDP
460.3 487.3 500.9 516.1 535.9 559.9 2,112.8
Expenses
24.9 25.1 25.0 24.8 24.7 24.6
Per cent of GDP
-4.0 8.5 12.9 18.2 28.8 20.6 80.4
Net operating balance
-0.2 0.4 0.6 0.9 1.3 0.9
Per cent of GDP
1.3 6.5 4.7 7.7 9.7 10.8 33.0
Net capital investment
-5.3 2.0 8.1 10.4 19.1 9.8 47.5
Fiscal balance
-0.3 0.1 0.4 0.5 0.9 0.4
Per cent of GDP
Memorandum items:
4.3 6.6 5.1 5.2 5.6 6.2 22.2
Net Future Fund earnings(c)
-25.9 -12.7 -4.4 -0.5 7.9 2.5 5.6
Headline cash balance
(a) Total is equal to the sum of amounts from 2019-20 to 2022-23.
(b) Payments are equal to cash payments for operating activities, purchases of non-financial assets and net acquisition of assets under finance leases.
(c) Under the Future Fund Act 2006, net Future Fund earnings will be available to meet the Australian Government’s superannuation liability in 2020-21.
From this time, the underlying cash balance includes expected net Future Fund earnings.
(d) Excludes expected net Future Fund earnings before 2020-21.
BUDGE T OVERVI EW 31Appendix B
Revenue and spending
Total revenue for 2019-20 is expected to be $513.8 billion, an increase
of 3.6 per cent on estimated revenue in 2018-19. Total expenses for
2019-20 are expected to be $500.9 billion, an increase of 2.8 per cent
on estimated expenses in 2018-19
Where revenue comes from (2019-20)
Other taxes $10.2 billion
Superannuation taxes $9.8 billion Fringe benefits tax $4.0 billion
Customs duty $21.1 billion Other excise $3.7 billion
Fuels excise $20.5 billion
Non-tax revenue $37.2 billion
Sales taxes $71.4 billion Individuals income tax $234.1 billion
Company and resource rent taxes $101.9 billion
Where taxpayers’ money is spent (2019-20) (a)
General public services $23.6 billion
Defence $32.2 billion
All other functions $48.5 billion
Education $36.4 billion
Other purposes $98.3 billion
Health $81.8 billion
Social security and welfare $180.1 billion
(a) Refer Statement 5: Expenses and Net Capital Investment of 2019-20 Budget Paper No.1 for further information.
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