BUDGET – AUSTRALIA

Shorten’s magic pudding

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Original article by Simon Benson, Joe Kelly
The Australian – Page: 1 & 4 : 4-Apr-19

Tax relief for Australians with annual income of less than $40,000 will be a key focus for Labor leader Bill Shorten in his Budget reply speech on 4 April. Workers whose income is below this threshold will be offered more generous tax cuts than those outlined in the Budget. Meanwhile, the federal government has announced that the one-off cash payment cash for pensioners, single parents and carers to offset rising energy costs will be extended to Newstart recipients. This will add about $80m to the cost of the Budget measure.

CORPORATES
AUSTRALIAN LABOR PARTY, LIBERAL PARTY OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF FINANCE

Flatter scales an incentive to work more

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Original article by John Kehoe
The Australian Financial Review – Page: 1 & 8 : 4-Apr-19

Labor contends that the 10-year tax cuts package outlined in the April 2019 Budget is regressive as it will reduce the tax burden of people on high incomes. The current income tax brackets would be replaced by just three in mid-2024. University of Canberra labour economist Phil Lewis argues that while the tax system would be slightly less progressive under the Coalition’s plan, it would reduce the disincentive to earn more. Sinclair Davidson from the Institute of Public Affairs in turn says that flatter personal income tax rates would reduce bracket creep.

CORPORATES
AUSTRALIAN LABOR PARTY, UNIVERSITY OF CANBERRA, INSTITUTE OF PUBLIC AFFAIRS LIMITED, DELOITTE ACCESS ECONOMICS PTY LTD, AUSTRALIA. DEPT OF THE TREASURY

Stunning lost opportunity on innovation

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Original article by Ben Potter
The Australian Financial Review – Page: 1 & 6 : 4-Apr-19

Former Innovation Science Australia chairman Bill Ferris has criticised the April 2019 Budget’s lack of policy announcements regarding innovation. He describes it as a missed opportunity to address declining investment in innovation by both government and business. Ferris argues that innovation is a key driver of productivity. The federal government will also reduce funding for the R&D tax incentive program by a further $1.35bn over four years. Krish Patel of Element 8 Group warns that government policy is forcing business start-ups to outsource R&D work offshore.

CORPORATES
INNOVATION SCIENCE AUSTRALIA, ELEMENT 8 GROUP, AUSTRALIAN TAXATION OFFICE, CSIRO, GEOSCIENCE AUSTRALIA

Hopes for higher pay revised down

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Original article by David Marin-Guzman
The Australian Financial Review – Page: B8 : 3-Apr-19

The April 2019 Budget papers show that the federal government has scaled back its wage growth forecasts since the mid-year economic and fiscal outlook. It now expects wages to grow by 2.5 per cent in 2018-19 and 2.75 per cent in 2019-20. Wages growth in 2020-21 in turn is expected to be 3.25 per cent. In contrast, the Reserve Bank has forecast wages growth of about 2.5 per cent until 2020, and 2.6 per cent by mid-2021. Meanwhile, the unemployment rate is forecast to be five per cent over the forward estimates period, while the labour participation rate is expected to ease to 65.5 per cent in 2018-19.

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To surplus with love

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Original article by Simon Benson
The Australian – Page: 1 & 5 : 3-Apr-19

The federal government’s April 2019 Budget has forecast a surplus of $7.1bn in 2019-20, and accumulated surpluses of $45bn over the four-year forward estimates period. The government also expects net debt to be reduced to zero by 2029-30. Highlights of the Budget include tax relief for individuals, dual-income families and small businesses, an additional $100bn worth of funding for infrastructure projects and $525m to create 80,000 apprenticeships in sectors that are experiencing skills shortages.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF FINANCE

Top tax rate for 13.3 million will be 30pc

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Original article by Joanna Mather
The Australian Financial Review – Page: B3 : 3-Apr-19

The April 2019 Budget includes some $302m worth of tax relief over the next decade, including the $144m tax package announced in 2018. Individuals will benefit from an immediate increase in the low- to middle-income tax offset, with the tax cut to be available when they lodge tax returns for 2018-19. The 32.5 per cent income tax bracket will be reduced to 30 per cent from 1 July 2024, and an estimated 70 per cent of taxpayers will be in this bracket. Just six per cent will pay the highest marginal tax rate of 45 per cent from mid-2024.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY

Start-ups reveal their federal budget wish-lists

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Original article by Liz Main
The Australian Financial Review – Page: 19 : 2-Apr-19

Clarification concerning research and development tax incentives is one of the biggest points of interest for technology start-ups with regard to the federal government’s April 2019 Budget. Des Hang, the CEO and co-founder of vehicle subscription service Carbar, says it is too easy for larger companies to be able to claim tax breaks under the R&D incentive scheme. Investment in better education programs is something else that the technology sector wants to see, along with immigration reform.

CORPORATES
CARBAR, COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, ATLASSIAN CORPORATION PLC, 99DESIGNS PTY LTD, FINTECH AUSTRALIA PTY LTD

Coalition to ram through budget tax cuts ahead of poll

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Original article by Phillip Coorey, Andrew Tillett
The Australian Financial Review – Page: 1 & 6 : 2-Apr-19

Labor has indicated that it will not oppose tax cuts in the April 2019 Budget if they largely benefit people on low and middle incomes. Changes to the Low Income Tax Offset are expected to be among the tax reforms to be outlined in the Budget. The tax cuts and one-off cash payments to offset rising energy costs are likely to be put to parliament on 3 April, with a view to making it harder for Labor to repeal them if it wins the election. Opposition Leader Bill Shorten contends that Labor’s tax cuts package will be of more benefit to 10 million working Australians than the Coalition’s policy.

CORPORATES
AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET

Coalition defuses debt bomb

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Original article by Simon Benson
The Australian – Page: 1 & 2 : 2-Apr-19

Prime Minister Scott Morrison has rejected suggestions that the April 2019 Budget will be a ‘cash splash’ ahead of the federal election, stressing the government’s track record for fiscal discipline. Meanwhile, the Budget papers are forecast to show that Australia’s net debt will be reduced to zero by 2028-29 under the Coalition, compared with $370bn at present. The Budget is expected to remain in deficit for 2018-19, although it is likely to be lower than the $5.2bn that was forecast in the mid-year update. The government is tipped to bring forward the second and third stages of its tax cuts package.

CORPORATES
AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. DEPT OF FINANCE, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIAN LABOR PARTY, AUSTRALIA. FUTURE FUND MANAGEMENT AGENCY, AUSTRALIAN FEDERAL POLICE, AUSTRALIAN SECURITY INTELLIGENCE ORGANISATION

Coalition’s $1bn drive to get regions moving

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Original article by Joe Kelly
The Australian – Page: 1 & 4 : 1-Apr-19

The federal government’s April 2019 Budget will include an additional $1bn for the Roads of Strategic Importance program. The extra funding will be used to upgrade regional and interstate road infrastructure. The Budget will also include one-off payments to assist people such as pensioners, veterans and the disabled with the rising cost of energy. Treasurer Josh Frydenberg says the Budget will focus on responsible and targeted spending, while shadow treasurer Chris Bowen says it will be a "highly political" document that will in reality be an election campaign launch for the Coalition.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, AUSTRALIA. DEPT OF THE PRIME MINISTER AND CABINET, NATIONAL PARTY OF AUSTRALIA, SHOOTERS, FISHERS AND FARMERS PARTY